Preamble

The House met at Twelve of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Lancashire County Council (Drainage) Bill (King's Consent signified),

Bill read the third time, and passed.

Tendring Hundred Water and Gas Bill [Lords],

As amended, considered; to be read the Third time.

Ministry of Health Provisional Orders (No.7) Bill,

Read the Third time, and passed.

PILOTAGE PROVISIONAL ORDERS (NO 6) BILL,

"to confirm certain Pilotage Orders made by the Board of Trade under the Pilotage Act, 1913, relating to pilotage in the Pilotage Districts of Arundel, Berwick, and Lancaster," presented by Sir WILLIAM MITCHELL-THOMSON.

Ordered, That Standing Order 193a be suspended, and that the Bill be now read the First time.—[The Chairman of Ways and Means.]

Bill accordingly read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 150.]

PILOTAGE PROVISIONAL ORDERS (NO. 7) BILL,

"to confirm certain Pilotage Orders made by the Board of Trade under the Pilotage Act, 1913, relating to pilotage in the pilotage districts of Aberdeen, Ardrossan, Ayr, Inverness, Montrose, and Stonehaven, presented by Sir WILLIAM MITCHELL-THOMSON.

Ordered, that Standing Order 193a be suspended, and that the Bill be now read the first time.—[The Chairman of Ways and Means.]

Bill accordingly read the first time, and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 151.]

GLASGOW DEAF AND DUMB INSTITUTION ORDER CONFIRMATION BILL,

"to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1899, relating to Glasgow Deaf and Dumb Institution," presented by Mr. MUNRO; and ordered (under Section 7 of the Act) to be considered upon Monday next.

BUSINESS OF THE HOUSE.

Motion made, and Question put,
That the Proceedings on the Finance Bill be not interrupted this day at Five or half-past Five of the clock."—[Mr. Chamberlain.]

The House divided: Ayes, 154; Noes, 16.

Division No. 196.]
AYES.
[12.8 p.m.


Adair, Rear-Admiral Thomas B. S.
Cecil, Rt. Hon. Evelyn (Birm., Aston)
Falcon, Captain Michael


Amery, Leopold C. M. S.
Chamberlain, Rt. Hn. J. A.(Birm.,W.)
Falle, Major Sir Bertram Godfray


Ashley, Colonel Wilfrid W.
Child, Brigadier-General Sir Hill
Fildes, Henry


Bagley, Captain E. Ashton
Churchman, Sir Arthur
Forrest, Walter


Baird, Sir John Lawrence
Clay, Lieut.-Colonel H. H. Spender
Ganzoni, Sir John


Baldwin, Rt. Hon. Stanley
Clough, Robert
Geddes, Rt. Hon. Sir E. (Camb'dge)


Balfour, George (Hampstead)
Cobb, Sir Cyril
Gibbs, Colonel George Abraham


Barlow, Sir Montague
Colfox, Major Wm. Phillips
Gilmour, Lieut.-Colonel Sir John


Barnston, Major Harry
Coote, Colin Reith (Isle of Ely)
Goff, Sir R. Park


Barrand, A. R.
Cope, Major William
Grant, James Augustus


Bellairs, Commander Carlyon W.
Curzon, Captain Viscount
Green, Joseph F. (Leicester, W.)


Bird, Sir A. (Wolverhampton, West)
Davies, Thomas (Cirencester)
Greene, Lt.-Col. Sir W. (Hack'y, N.)


Blair, Sir Reginald
Dewhurst, Lieut.-Commander Harry
Guinness, Lieut.-Col. Hon. W. E.


Borwick, Major G. O.
Dockrell, Sir Maurice
Hacking, Captain Douglas H.


Boscawen, Rt. Hon. Sir A. Griffith-
Doyle, N. Grattan
Hall, Rr-Adml Sir W.(Liv'p'l,W.D'by)


Bowyer, Captain G. W. E.
Du Pre, Colonel William Baring
Hannon, Patrick Joseph Henry


Boyd-Carpenter, Major A.
Edgar, Clifford B.
Harmsworth, Hon. E. C. (Kent)


Breese, Major Charles E.
Edge, Captain William
Harris, Sir Henry Percy


Brown, Major D. C.
Edwards, Major J. (Aberavon)
Haslam, Lewis


Buchanan, Lieut.-Colonel A. L. H.
Edwards, Hugh (Glam., Neath)
Hennessy, Major J. R. G.


Buckley, Lieut.-Colonel A.
Elliot, Capt. Walter E. (Lanark)
Henry, Denis S. (Londonderry, S.)


Burn, Col. C. R. (Devon, Torquay)
Elveden, Viscount
Hewart, Rt. Hon. Sir Gordon


Cautley, Henry Strother
Eyres-Monsell, Com. Bolton M.
Hickman. Brig.-General Thomas E.


Hope, Sir H.(Stirling & Cl'ckm'nn,W.)
Morrison-Bell, Major A. C.
Stanier, Captain Sir Beville


Hopkins, John W. W.
Munro, Rt. Hon. Robert
Stanley, Major Hon. G. (Preston)


Horne, Sir R. S. (Glasgow, Hillhead)
Murray, C. D. (Edinburgh)
Stewart, Gershom


Hotchkin, Captain Stafford Vere
Murray, John (Leeds, West)
Surtees, Brigadier-General H. C.


Hunter, General Sir A. (Lancaster)
Neal, Arthur
Sueter, Rear-Admiral Murray Fraser


Hurst, Lieut.-Colonel Gerald B.
Newman, Sir R. H. S. D. L. (Exeter)
Taylor, J.


Jackson, Lieut.-Colonel Hon. F. S.
Nicholson, Reginald (Doncaster)
Thomas-Stanford, Charles


James, Lieut.-Colonel Hon. Cuthbert
Nicholson, William G. (Petersfield)
Thomson, F. C. (Aberdeen, South)


Jodrell, Neville Paul
Ormsby-Gore, Hon. William
Thomson, Sir W. Mitchell- (Maryhill)


Johnstone, Joseph
Palmer, Brigadier-General G. L.
Townley, Maximilian G.


Jones, Sir Evan (Pembroke)
Parker, James
Tryon, Major George Clement


Jones, J. T. (Carmarthen, Llanelly)
Parry, Lieut.-Colonel Thomas Henry
Walters, Rt. Hon. Sir John Tudor


Kellaway, Rt. Hon. Fredk. George
Pease, Rt. Hon. Herbert Pike
Ward, William Dudley (Southampton)


Kelley, Major Fred (Rotherham)
Peel, Col. Hn. S. (Uxbridge, Mddx.)
Waring, Major Walter


King, Captain Henry Douglas
Percy, Charles (Tynemouth)
Warner, Sir T. Courtenay T.


Law, Alfred J. (Rochdale)
Perring, William George
White, Col. G. D. (Southport)


Lewis, Rt. Hon. J. H. (Univ., Wales)
Pollock, Sir Ernest Murray
Wild, Sir Ernest Edward


Lloyd-Greame, Sir P.
Rae, H. Norman
Williams, C. (Tavistock)


Locker-Lampson, Com. O. (H'tingd'n)
Rankin, Captain James Stuart
Willoughby, Lieut.-Col. Hon. Claud


Lorden, John William
Rawlinson, John Frederick Peel
Wilson, Capt. A. S. (Holderness)


Lowther, Major C. (Cumberland, N.)
Richardson, Alexander (Gravesend)
Wise, Frederick


Macdonald, Rt. Hon. John Murray
Roberts, Samuel (Hereford, Hereford)
Wood, Hon. Edward F. L. (Ripon)


Macnamara, Rt. Hon. Dr. T. J.
Roberts, Sir S. (Sheffield, Ecclesall)
Wood, Major Sir S. Hill- (High Peak)


Macpherson, Rt. Hon. James I.
Robinson, S. (Brecon and Radnor)
Worthington-Evans, Rt. Hon. Sir L.


Mallalieu, Frederick William
Sanders, Colonel Sir Robert Arthur
Young, E. H. (Norwich)


Malone, Major P. B. (Tottenham, S.)
Sassoon, Sir Philip Albert Gustave D.



Meysey-Thompson, Lieut.-Col. E. C.
Seager, Sir William
TELLERS FOR THE AYES.—


Mildmay, Colonel Rt. Hon. F. B.
Shaw, Hon. Alex. (Kilmarnock)
Col. Leslie Wilson and Mr.


Moore, Major-General Sir Newton J.
Shaw, Capt. William T. (Forfar)
McCurdy.


Morison, Rt. Hon. Thomas Brash
Shortt, Rt. Hon. E. (N'castle-on-T.)



NOES.


Acland, Rt. Hon. Francis D.
Hartshorn, Vernon
Myers, Thomas


Cape, Thomas
Hodge, Rt. Hon. John
Richardson, R. (Houghton-le-Spring)


Collins, Sir Godfrey (Greenock)
Hogge, James Myles
Royce, William Stapleton


Devlin, Joseph
Holmes, J. Stanley
Swan, J. E.


Galbraith, Samuel
Kenyon, Barnet



Grundy, T. W.
Kiley, James Daniel
TELLERS FOR THE NOES.—




Mr. Hayday and Mr. C. White.


Second Resolution read a Second time.

NEW WRIT.

For the County of Down (Mid-Down Division) in the room of Colonel Sir James Craig, Baronet, Prime Minister of Northern Ireland.—[Colonel Leslie Wilson.]

Orders of the Day — FINANCE BILL.

Considered in Committee [Progress, 21st June].

[Mr. JAMES HOPE in the Chair.]

FIRST SCHEDULE.

RELIEF FROM EXCESS PROFITS DUTY IN RESPECT OF TRADING STOCKS.

PART I.

1. If any person being the owner of any trade or business at the end of the final accounting period proves that the amount at which the whole of the trading stock in hand at the end of that period is brought into account for the purposes of duty exceeds the value as on the thirty-first day of August, nineteen hundred and twenty-one, of an equal quantity of similar stock, the amount of that excess shall be allowed as a deduction in computing the excess profits of the final accounting period or as an addition to any deficiency for that period, as the case may be.

2. In any case where the accounts of the trade or business have not been made up at the end of the final accounting period, the foregoing provisions of this Part of this Schedule shall have effect as though a reference to the trading stock in hand at the latest date at which the accounts of the trade or business were made up before the end of the final accounting period were substituted for the reference to the trading stock in hand at the end of the final accounting period, and as though the amount to be allowed as a deduction or addition as aforesaid were reduced by a proportionate amount to be computed in accordance with the following provisions of this paragraph.

For the purposes of computing the proportionate amount aforesaid there shall be ascertained the sum by which the a mount at which the whole of the trading stock in hand at the latest date at which the accounts of the trade or business were made up before the end of the final accounting period (in this paragraph referred to as "the first date") was brought into account for the purposes of the duty exceeds the value as on the earliest date at which the accounts of the trade or business are made up after the end of the final accounting period (in this paragraph referred to as "the second date") of an equal quantity of similar stock, and the proportionate amount shall be taken to be an amount which bears the same proportion to the sum ascertained as aforesaid as the length of the period between the first date and the end of the final accounting period bears to the length of the period between the first date and the second date.

3. For the purpose of the foregoing provisions of this Part of this Schedule there shall be excluded from stock in hand any stock of which a valuation at a constant price
has been accepted by the Commissioners of Inland Revenue for purposes of duty.

4. The amount to be allowed as a deduction or addition under this Part of this Schedule shall not in any case exceed the amount by which the profits of the trade or business for the period from the end of the final accounting period to the thirty-first day of August, nineteen hundred and twenty-one, fall short of the percentage standard of that trade or business, or if there has not been one prewar trade year, fall short of the pre-war standard of profits based on the statutory percentage on the average amount of capital employed in the trade or business during the first accounting period, and if the profits aforesaid are not less than such standard, the provisions of this Part of this Schedule shall not apply.

5. No claim under this Part of this Schedule shall be allowed unless the accounts of the trade or business are made up to the thirty-first day of August, nineteen hundred and twenty-one.

6. Where a trade or business has after the end of the final accounting period and before the thirty-first day of August, nineteen hundred and twenty-one, ceased or changed ownership, this Part of this Schedule shall apply as if the date of the cessation or change of ownership were substituted for the thirty-first day of August, nineteen hundred and twenty-one.

PART II.

1. If any person who is at the end of the final accounting period the owner of any trade or business proves that he has sustained a loss on the sale at any time during the period between the first day of September, nineteen hundred and twenty-one, and the thirty-first day of August, nineteen hundred and twenty-three, both inclusive (in this Part of this Schedule referred to as "the sales period"), of the whole of the trading stock in hand on the thirty-first day of August, nineteen hundred and twenty-one, the amount of the loss shall be allowed as a deduction in computing the excess profits of the final accounting period or as an addition to any deficiency for that period, as the case may be:

Provided that for the purpose of the foregoing provision there shall be excluded from stock in hand any stock of which a valuation at a constant price has been accepted by the Commissioners of Inland Revenue for the purposes of duty.

2. For the purposes of this Part of this Schedule the amount of the loss on sales of stock shall be computed by deducting from the cost of the stock, or if the value of the stock as on the thirty-first day of August, nineteen hundred and twenty-one; is less than its cost, from that value, a sum computed in accordance with the following provisions, of this Part of this Schedule (in this Part of this Schedule referred to as "the realised sum").

3. Where the quantity of any particular class of trading stock which is in hand on the thirty-first day of August, nineteen hundred and twenty-one, is not greater than the quantity of the same class of stock sold
during the sales period, the realised sum shall be taken to be the sum realised on sales of stock up to the time at which the quantity of stock of that class sold first reaches the quantity of stock so in hand.

4. Where the quantity of any particular class of trading stock which is in hand on the thirty-first day of August, nineteen hundred and twenty-one, exceeds the quantity of the same class of trading stock sold during the sales period the realised sum shall be taken to be the sum realised on the sales of stock of that class with the addition of an amount equal to the value as on the thirty-first day of August, nineteen hundred and twenty-three, of a quantity of stock of that class equal to the quantity by which the stock in hand exceeds the quantity of stock of the same class sold.

5. For the purposes of this Part of this Schedule, trading stock sold during the sales period shall not be deemed to be of a different class from trading stock in hand on the thirty-first August, nineteen hundred and twenty-one, by reason only that the stock sold has passed through a further stage of manufacture:

Provided that—

(a) Where a particular class of trading stock in hand on the thirty-first day of August, nineteen hundred and twenty-one, consists of similar stock in different stages of manufacture and the quantity sold during the sales period is less than the quantity so in hand, the quantity sold shall be deemed to consist of that part of the stock which on the thirty-first August, nineteen hundred and twenty-one, was completely or most nearly completely manufactured; and
(b) Where the stock sold has passed through a further process of manufacture than that undergone by the stock in hand on the thirty-first day of August, nineteen hundred and twenty-one, the realised sum shall, for purposes of this Part of this Schedule, be reduced by the cost of the material and labour employed in the further process of manufacture, and the loss to be allowed under paragraph 1 of this Part of this Schedule shall, instead of being the full amount ascertained in accordance with the provisions of paragraph 2 of this Part of this Schedule, be an amount which bears to that full amount the same proportion as the amount of the cost or value, as the case may be, mentioned in the said paragraph 2 bears to the amount of that cost or value increased by the cost of the material and labour aforesaid.

6. For the purposes of this Part of this Schedule where trading stock is sold during the sales period at a price less than its value at the time when the price is determined, the realised sum shall be taken to be the value at that time.

7. A claim under this Part of this Schedule shall not be allowed unless the stock of the trade or business is actually taken on the
thirty-first day of August, nineteen hundred and twenty-one.

8. Where a trade or business has during the sales period ceased or changed ownership this Part of this Schedule shall apply as if the date of the cessation or change of ownership were substituted for the thirty-first day of August, nineteen hundred and twenty-three.

PART III.

1. If any person who is at the end of the final accounting period the owner of any trade or business proves that the yearly average of the profits of the trade or business for the period between the first day of September, nineteen hundred and twenty-one, and the thirty-first day of August, nineteen hundred and twenty-five, both inclusive, is less than the amount of the percentage standard of the trade or business or, where there has not been one pre-war trade year, than the pre-war standard of profits based on the statutory percentage on the average amount of capital employed in the trade or business during the first accounting period, or that he has suffered a loss in respect of that period, and that the deficiency has arisen owing to the holding by him of trading stocks at falling prices, he shall be entitled to repayment of an amount equivalent to eighty per cent. of the total net deficiency for that period:

Provided that the amount repaid shall not exceed forty per cent. of one-half of the net excess profits on which duty was paid by that person in respect of the trade or business for the two years to the end of the final accounting period, and shall not exceed the aggregate amount of the duty paid by him in respect of the trade or business less the amount of any repayment made to him in respect thereof.

In computing the net excess profits for the two years aforesaid, a deduction shall be made in respect of any deficiency in the. profits for any part of that period in respect of which the person aforesaid was entitled to a repayment or set-off of excess profits duty under subsection (3) of section thirty-eight of the principal Act.

2. Where the trade or business has at any time after the thirty-first day of August, nineteen hundred and twenty-one, and before the thirty-first day of August, nineteen hundred and twenty-five, ceased or changed ownership any relief under this Part of this Schedule shall be computed as if the date of the cessation or change of ownership were substituted for the thirty-first day of August, nineteen hundred and twenty-five, in paragraph 1 of this Part of this Schedule, and as if in the proviso to that paragraph there were substituted for forty a number bearing the same proportion to forty as the length of the period from the thirty-first day of August, nineteen hundred and twenty-one, to the date of cessation or change of ownership bears to four years.

3. No relief shall be given under this Part of this Schedule to the owner of any trade or business in respect of which the Commissioners of Inland Revenue have accepted for purposes of duty a valuation of the whole or part of the trading stock at a constant price.

PART IV.

1. The profits of a trade or business for any period, and the pre-war standard of profits, whether a percentage standard or a pre-war standard of profits based on the statutory percentage on the average amount of capital employed in the trade or business during the first accounting period, shall for the purposes of this Schedule be computed on the basis prescribed by Part III. of the principal Act, as if such first-mentioned period were an accounting period, and where the period for which the profits of a trade or business fall to be ascertained is a period less than a year, the amount of the pre-war standard of profits shall be proportionately reduced:

Provided that where any period which would, if the section of this Act providing for the termination of excess profits duty had not passed, have been an accounting period of any trade or business within the meaning of the principal Act commences before and ends after the termination of the final accounting period of that trade or business, the profits of the first-mentioned period shall be computed on the basis prescribed by Part III. of the principal Act as if that period were an accounting period, and shall be apportioned between the time ending on and the time subsequent to the date of the termination of the final accounting period in proportion to the number of months or fractions of months before and after that date respectively.

2. The Commissioners of Inland Revenue shall have the same power to require for the purposes of a claim under this Schedule the furnishing of returns of profits and other particulars as they have under Part III. of the principal Act, as if the period for which the returns and particulars are required were an accounting period.

3.—(1) Every person making a claim under this Schedule in relation to any trade or business shall, in support of the claim, and on being so required by the Commissioners of Inland Revenue by notice in writing, furnish to the Commissioners returns in writing containing such particulars with respect to the trading stock of the trade or business in hand at any material date, including particulars with respect to the cost price, sale price, or value of the stock at any material date, and with respect to any other matters relevant to the claim, as the Commissioners may require.

(2) Every return furnished in pursuance of this paragraph shall be signed by the person making the claim, or where the claim is made by a firm or by a company by one of the partners in the firm or by the secretary or some other responsible officer of the company, as the case may be, and shall, if the Commissioners so require, be certified by some person being a member of an incorporated society of accountants, and shall be verified by the production of such evidence and otherwise as the Commissioners may direct.

4. The provisions of the second paragraph of subsection (2) of section forty-four of the principal Act (which impose a penalty on persons failing to comply with any require-
ments of the Commissioners under that section) shall apply to any requirements of the Commissioners under paragraphs 2 and 3 of this Part of this Schedule as they apply to requirements under that section.

5. Nothing in this Schedule shall derogate from the power of the Commissioners of Inland Revenue to make assessments and collect duty for any accounting period without reference to any notice which may be given that the owner of the trade or business intends to claim relief under any part of this Schedule.

6. Relief under this Schedule shall be given by way of repayment to the person who is at the end of the final accounting period the owner of the trade or business, except in cases where it can be set off against any duty which has been assessed on him for any accounting period and remains unpaid.

7. Any repayment under this Schedule shall for purposes of income tax be treated as a repayment of duty, and any set-off under this Schedule shall for those purposes be treated as a repayment of duty made at the date when the amount of the set-off is ascertained.

8. Relief granted under this Schedule shall not be taken into account for purposes of the section of this Act relating to the adjustment of duty over the aggregate period of charge.

9. Subsection (5) of section forty-five of the principal Act shall apply to a determination of the Commissioners of Inland Revenue under this Schedule as it applies to the amount of an assessment of duty.

10. For the purposes of this Schedule a trade or business shall not be deemed to have changed ownership unless the Commissioners of Inland Revenue are satisfied that the change was made bonâ fide and was not an artificial or fictitious transaction.

11. In this Schedule the expression "duty" means excess profits duty.

Sir G. COLLINS: I beg to move, in Part I, paragraph 3, after the word "price" ["valuation at a constant price"], to insert the words "or other specially agreed method of valuation."
Very late last night my hon. Friend, the Member for East Wolverhampton (Mr. Thorne), asked me to move this Amendment standing in his name. The object of it is to define more accurately the words in the Bill.

THE CHANCELLOR OF THE EXCHEQUER (Sir Robert Horne): I would very gladly give consideration to the Amendment if I understood it. I have tried to understand what is meant, and I hope if the right hon. Gentleman (Mr. Thorne) addresses the Committee, he will be able to inform me so that I can clearly follow him. I only know of three methods of arriving at a valuation. One is the
market price, another is cost price, and the third is this invariable price, which is called a constant price, which is taken in businesses which can always guarantee a certain amount of stock for manufacture, and it is put in at a price which is practically bedrock and taken as never varying. I do not know of any other. If I knew what was referred to as "other specially agreed methods of valuation," I should be very glad to meet it, but I do not know what it is, and accordingly I do not think we should encumber the statute with anything we do not entirely understand.

Amendment negatived.

Mr. HOLMES: I beg to move, in Part I, paragraph 4, after the word "twenty-one" ["nineteen hundred and twenty-one"], to insert the words "after any adjustments in respect of increased or decreased capital."
This is set down for the purpose of clearness. The paragraph states that the allowance in respect of the depreciation of stock shall not exceed the amount by which the profits of the trade or business for the period from the end of the final accounting period to 31st August, 1921, fall short of the percentage standard. The percentage standard in any business is a statutory percentage upon the capital of the business at the commencement of the first accounting period. Trades and businesses are allowed in addition a statutory percentage of any increased capital in any subsequent accounting period, but that has nothing to do with the percentage standard. The percentage standard still remains the statutory percentage on the capital at the commencement of the first accounting period. The matter in practice has been adjusted by deducting the interest on the increased capital from the profits in the accounting period before they are assessed. I only want to make sure that that is the intention of the paragraph, that when the matter is adjusted there will be added to the profits of the trade or business for the period from the end of the final accounting period to 31st August, 1921, any allowance for increased capital or a deduction made for decreased capital.

Sir R. HORNE: The practice necessitated by the words of the original statute is to deduct from the profits a percentage on the new capital which has been introduced after the beginning of the account-
ing period, and accordingly there will be the deduction which my hon. Friend mentioned of a higher percentage upon all the capital which is introduced after the beginning of the Excess Profits Duty.

Mr. HOLMES: The reason I felt it necessary to put this down was that in the Coal Mines Bill the Government themselves found it necessary to insert these words. As the right hon. Gentleman has explained that that has met his view, I ask leave to withdraw.

Amendment, by leave, withdrawn.

Mr. HOLMES: I beg to move in Part I, paragraph 4, to leave out the words
the percentage standard of that trade or business, or if there has not been one prewar trade year, fall short of the pre-war standard of profits based on the statutory percentage on the average amount of capital employed in the trade or business during the first accounting period,
and to insert instead thereof the words
an amount equal to the statutory percentage on the capital of the trade or business as existing at the commencement of the last accounting period.
This is frankly a request to increase the amount which trades and businesses will be allowed. A trade or business has its percentage standard and then its interest on increased capital. The percentage standard of a limited company would be calculated at the rate of 6 per cent. upon its capital at the commencement of the first accounting period. Then for any increased capital for its last accounting period it would get 11 per cent., so that a firm which had £300,000 capital pre-war and has increased it by £100,000 since 1914, would get 6 per cent. on £300,000 and 11 per cent. on £100,000. What I am proposing is that it shall get 11 per cent. on the whole of its capital. The reason for increasing from 6 per cent. gradually up to 11 per cent. was because capital required a greater return than before the war. Government loans were 3 per cent. before the war, but they have had to pay up to 6 per cent., and those who have put money into business have expected a higher rate of interest, as the result of increased prices and increased cost of living, than they expected in 1914. Having regard to the fact that that state of things still exists, it will be equitable that firms and companies should receive 11 per cent. on the whole of their capital and not have to go back to the old 6 per cent. of pre-war days.

Sir R. HORNE: I am sorry I cannot meet the hon. Member's request. It is an attempt to increase the allowance which should be made to those who claim a set-off against Excess Profits Duty which they have already paid in respect of losses in the valuation of their stock subsequently. It would cost a very considerable sum of money, which affects my mind at once, as no doubt the Committee will understand. The standard of 6 per cent. on pre-war capital was originally fixed, and at a later period the question arose as to whether capital introduced after the beginning of the war should be recompensed at a higher rate. Originally, I think the Committee fixed the amount at 9 per cent., and subsequently increased it to 11 per cent. In the case of private firms it is 13 per cent. on the capital introduced after the war and 8 per cent. on the capital in existence before the war.

Mr. HOLMES: Seven per cent.

Sir R. HORNE: No, I think I am right in saying it is 8 per cent.

Mr. HOLMES: Six per cent. for companies, and 7 per cent. for private firms.

Sir R. HORNE: At all events the House has deliberated upon this matter and has given a considered judgment. When the question of capital introduced after the beginning of war was considered the House deliberately gave a higher remuneration upon that capital than upon pre-war capital. They did not seek to raise the standard of remuneration upon pre-war capital, recognising the fact which my hon. Friend has pointed out, that capital before the war was much easier to get at a cheaper rate than after the war. The inference to be drawn from that is that that capital having been got easily at a cheaper rate, the remuneration upon it should be less than upon capital introduced after the war. The hon. Member now seeks to give the pre-war capital the same rate of remuneration as the capital introduced after the war. I do not think there are any grounds for that. I am looking at the fact that it would cost a good deal of money, and I cannot find any justification for accepting the Amendment.

Amendment negatived.

Mr. HOLMES: I beg to move, in Part II, at the end of paragraph 5 (b), to insert a new paragraph—
(c) Where the trading stock in hand on the thirty-first day of August, nineteen hundred and twenty-one, consists wholly or in part of raw material which upon being put into process of manufacture loses its identity the realised price of such material shall be taken to be the market price of such material ruling on the day when it is passed into process of manufacture and that day shall also be taken to be the day when such material is sold.
like my first Amendment, this Amendment is put down for the purpose of making the matter clear, and I think it is self-explanatory.

Sir R. HORNE: I was very much impressed with the merits of this Amendment when I first read it. There seemed to be a justification for taking my hon. Friend's plan rather than the plan in the Bill; but after having discussed the matter at length with my advisers, I have come to the conclusion that, upon the whole, the plan in the Bill will do more justice to all parties than would the plan in my hon. Friend's Amendment. My hon. Friend proposes that in valuing the raw material in process of manufacture it should be valued as at the date when it passes to the manufacturing side of the business. That plan has this defect, that in valuing at that date it might be a date much sooner than the 31st August, and, therefore, you might have the raw materials valued at that point of time at a higher rate than its real value at the 31st August, or at the time when it actually comes to be sold as part of the manufactured article. In that way the trader would suffer a loss. On the other hand, the converse might happen. He might at that time be getting the benefit of an assumed form which in fact the manufactured article has not realised. I agree that the plan in the Bill seems a little difficult on the face of it, but I am told that it works out quite well. The plan in the Bill is that you sell the manufactured article, and you assess the amount which is gained in the operation of manufacture, and in that way you arrive at the value of the raw material at the period when it was sold. I am informed that, taken over all, the plan works out quite efficaciously, and it seems to avoid the difficulties which I have mentioned which might arise on my hon. Friend's Amendment. For the reason which I have
stated, I am afraid I must stand by the original proposal in the Bill.

Mr. HOLMES: In view of what the Chancellor of the Exchequer has said, and seeing that it is a complicated matter, I will withdraw my Amendment. Perhaps I may have a conference with the right hon. Gentleman before the Report stage.

Amendment, by leave, withdrawn.

Mr. HOLMES: I beg to move, in Part II, at the end of paragraph 8, to insert the words

In this Schedule the expression "trading stock" includes—

(a) any goods such as are sold in the ordinary course of a trade or business whether in a finished condition or not; and
(b) any raw or other materials used in any such goods.

This, again, is by way of explanation as to what is trade stock. The words of this Amendment are the actual words used by the Government in the provisions of another Act in regard to trading stock, and possibly as this expression in regard to trading stock appears in a previous Government Act, it would be equally applicable to this one.

Sir R. HORNE: I should be glad if my hon. Friend would talk over this matter with myself and the Inland Revenue Officials As far as I can see at the moment, the definition which my hon. Friend suggests, although it is a definition taken from another Act, is unnecessary in regard to this particular matter. I am not entirely confident about that, and I should like to have an opportunity of going further into it. As the matter stands the definition given in the first part (a) of the Amendment is unnecessary. In regard to (b) that is too wide. For example, it would include such things as coal and oil, which I am certain my hon. Friend does not mean to include. They are raw materials "used in the manufacture or preparation of any such goods," but he does not mean them to be covered by the terms of this Amendment. I shall be glad to have an opportunity of discussing the matter with my hon. Friend.

Mr. HOLMES: I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. HOLMES: In view of what has happened in reference to my two former Amendments, I will not move the others of which I have given notice.

Mr. A. M. SAMUEL: I beg to move in Part III, paragraph 1, to leave out the words
amount of the percentage standard of the trade or business or, where there has not been one pre-war trade year, than the prewar standard of profits based on the statutory percentage on the average amount of capital employed in the trade or business during the
and to insert instead thereof the words
maximum amount of profit on which that trade or business would not have been liable to pay excess profits duty in respect of its final accounting period if the pre-war standard of profits for that trade or business had been taken to be the percentage standard.
I believe that this matter has been brought before the notice of the right hon. Gentleman by representatives of bodies of traders, and I commend the Amendment to its consideration.

Sir R. HORNE: I am not quite certain that I understand my hon. Friend's Amendment, but so far as I do understand it, it is precisely the question which was raised by the hon. Member for North East Derbyshire (Mr. Holmes) when he suggested that we should take the percent return upon the capital as the standard profit rather than the prewar standard of 6 per cent. Perhaps this goes a little further, but for the same reasons as I have given to the hon. Member for North East Derbyshire I cannot accept it.

Mr. SAMUEL: In those circumstances, I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. A. M. SAMUEL: I beg to move, in Part IV, paragraph 1, after the word "period" ["accounting period"], to insert the words
and so that all adjustments shall be made for increase and decrease of capital accordingly.
I believe that this is agreed to and is incorporated, and in that case I will not press it.

Sir R. HORNE: It is covered by another part.

Mr. SAMUEL: I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Mr. C. WHITE: I beg to move, in Part IV, paragraph 3 (2), after the word "accountants," to insert the words "or by a practising professional accountant approved by the Commissioners of Inland Revenue."
I confess that I am out of my element in wandering into the realms of finance, but my submission is that there are many competent expert accountants who are not members of any incorporated society of accountants but are fully qualified and are just as responsible persons as those who are members of these bodies. I know several myself who have been continually appointed by the Treasury under the Provident Societies Act, 1893, and under the Friendly Societies Act, 1896, hut according to my reading of this Clause responsible men such as these are debarred from giving a certificate as required, and what I desire is not to close the door against those men if the Commissioners of Inland Revenue are satisfied that they are responsible men. There is some precedent for this, because in the Munitions of War Act (1915), by the provisions with regard to the limitation of profits in controlled establishments accounts had to be supplied by these establishments, and it is stated that the audit must be by a member of an incorporated society of accountants, or by an accountant approved in any particular case by the Board of Trade. My object is solely that the Act shall not shut the door in this way, and the Treasury will be safeguarded by the fact that the Commissioners of Inland Revenue will have to be satisfied that these men are responsible men.

Sir R. HORNE: I appreciate to the full the considerations put forward by the

THIRD SCHEDULE


ADVANCES OUT OF CIVIL CONTINGENCIES FUND.


Body or Department to which Advance made.
Purpose for which Advance made.
Amount outstanding.








£


Royal Commission on Sugar Supplies
…
Purchase of sugar
…
…
…
21,650,000


Board of Trade
…
Purchase of zinc concentrates and spelter.
…
…
…
1,050,000


Minister of Agriculture and Fisheries
…
Flax production
…
…
…
350,000




Total
…
…
…
23,050,000

hon. Member, and I recognise at once that there are bodies of accountants, such as he describes, who are outside the ordinary associations of accountants, but I am embarrassed by his Amendment. It is an invidious duty to put upon the Inland Revenue to say with regard to a particular accountant that he is satisfactory and is perfectly respectable, and to say with regard to another that he is unsatisfactory and that his firm is not of sufficient repute to be employed for this purpose. I considered that matter very carefully in connection with the Bill itself, and I felt that I was not in a position to say with regard to one man that he satisfies the demand for respectability which the Inland Revenue required, and with regard to another that he does not. Obviously that is a very difficult and embarrassing position. Therefore I am thrown back on the ordinary arrangement with regard to these matters, and although there may be a hardship in certain cases, I do not think that I can be asked to go outside the members of incorporated societies of accountants.

Amendment negatived.

Lieut.-Colonel HURST and Sir R. NEWMAN had given notice of an Amendment in Part IV., paragraph 3 (2), to leave out the words "and otherwise as the Commissioners may direct."

The CHAIRMAN: This Amendment is out of order.

Schedule agreed to.

Second Schedule (Provisions for carrying out redemption of Government stock) agreed to.

Lieut.-Commander KENWORTHY: had given notice of Amendments to leave out the lines beginning "Royal Commission" "Board of Trade" and "Minister of Agriculture and Fisheries."

FOURTH SCHEDULE.


ENACTMENTS REPEALED.


Chapter.
Short Title.
Extent of Repeal.


39 & 40 Vict. c. 36.
The Customs Consolidation Act, 1876.
In section thirteen the words "except existing "warehouses of special security in respect of "which security by bond has hitherto been "dispensed with."


43 & 44 Vict. c. 34.
The Spirits Act, 1880
…
Subsection (6) of section one hundred and thirty-five.


46 & 47 Vict. c. 34.
The Cheap Trains Act, 1883
…
Section four, and in section five the words from the beginning of the section down to "but."


52 & 53 Vict. c. 42.
The Revenue Act, 1889
…
Section twenty-nine.


6 & 7 Geo. 5. c. 24.
The Finance Act, 1916
…
Section fifty-five, and the words "during the "continuance of the present war and a period of "six months thereafter" in section sixty.


8 & 9 Geo. 5. c. 40.
The Income Tax Act, 1918
…
Sections forty-three and forty-four.


10 & 11 Geo. 5. c. 18.
The Finance Act, 1920
…
In subsection (1) of section seven the words "Spark-"ling wine in bottle, an additional duty, the "gallon - - 5s. 0d.", and the words from "and in the case of" to the end of that subsection; in subsection (2) of that section the words from "and as though" to the end of that subsection; subsection (3) of that section; sections nine and ten.

Sir W. BULL: had given Notice of an Amendment to leave out the lines beginning "8 & 9 Geo. 5 c. 40."

The CHAIRMAN: This Amendment is out of order, because, these Sections having been repealed by a Clause, the insertion of words that they are so repealed is purely descriptive.

Mr. HOLMES: In last year's Act the Chancellor of the Exchequer accepted an Amendment omitting from the repeal Section the repeal of these Sections. Sections 43 and 44 of the Income Tax Act are in force in any year only when they are specifically re-enacted. Last year they were specifically re-enacted, and, therefore, have been applied to 1920–21; but they were not repealed. The Schedule to the 1920 Act included originally the Section to repeal them, but the Chancellor of the Exchequer accepted an Amendment omitting them from the repeal Section. Therefore, they stand on the Statute and can be re-enacted by the House in any particular year. I submit

The CHAIRMAN: These Amendments are out of order, because the words sought to be left out are purely descriptive, and their substance is already in the Bill.

Schedule agreed to.

that that is quite a different point from Clause 18.

The CHAIRMAN: The point is a complicated one, but on its face Clause 18 appears definitely to repeal them. This is what Sub-section (1) of Clause 18 says:
For the purpose of removing doubts it is hereby declared that sections forty-three and forty-four of the Income Tax Act, 1918 (which grant certain reliefs for any year of assessment as respects which they are respectively continued in force by any Act), were not continued in force for the year 1920–21, and the said sections are hereby repealed.
I do not think there can be any doubt about it.

Schedule agreed to.

Question proposed, "That the Bill, with Amendments, be reported."

Mr.-ACLAND: We were kept until five o'clock on Wednesday morning discussing many things which we were then not properly in a position to discuss, and the idea arose that there would be a full
day's work left to be done to-day. We have got through that work in thirty-five minutes, and the moral of it appears to be that we might have gone to bed a little earlier on Tuesday night so as to be in a better position for discussion to-day.

Sir R. HORNE: I agree that had I known we were going to get through our work so rapidly to-day, I should not have kept the House sitting so late on Tuesday night. But hon. Members must recognise that the reason for the speed with which we have completed our work to-day is that a large number of Amendments have not been moved, owing to the absence of Members. Had the Amendments on the Paper been moved and discussed, they would have occupied all the time to-day. I apologise to the Committee if I am supposed to have been guilty of extreme pressure on Tuesday night.

Bill reported, with Amendments; as amended to be considered upon Monday next, and to be printed.—[Bill 152.]

SUPPLY [23RD JUNE].

CIVIL SERVICE ESTIMATES AND SUPPLEMENTARY ESTIMATES, 1921–22.

CLASS II.

Resolutions reported:
1. "That a sum, not exceeding £40,089 (including a Supplementary sum of £3,550), be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1922, for the Salary of the Minister without portfolio, and Salaries and Expenses of the Cabinet Offices and of the Committee of Imperial Defence, including the cost of preparation of War Histories.

UNCLASSIFIED SERVICES.

2. "That a sum, not exceeding £21,220,000 (including a Supplementary sum of £9,000,000), be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1922, to meet Expenditure arising from the Government Control of Railways and Canals in Great Britain and Ireland under The Regulation of the Forces Act, 1871, Section 16, and Defence of the Realm (Consolidation) Regulations, 9 H."

Motion made, and Question "That the further consideration of the Resolution be now adjourned," put, and agreed to.—[Colonel Leslie Wilson.]

Resolution to be further considered upon Monday next.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

1.0 P.M.

Major BARNES: In spite of the fact that this matter came before the House-in Committee last night, it is necessary to comment on the fact that the House is asked to pass this Vote of a very large sum without any further explanation by the Minister of Transport. Last night we were fortunate enough to have the presence here of the Minister. He is not here now, and that is a misfortune, because, in spite of the great gifts of the Parliamentary Secretary, this matter raises very technical questions on which the Minister of Transport is an acknowledged expert. We are asked to assent to a Supplementary Estimate which calls for a sum of £9,000,000. This sum arises directly out of the liability of the Government under certain agreements between the Government and the railway companies, but it does not arise in the normal course. What brings the matter particularly before the House is the coal stoppage. When this subject was introduced in Committee last night, the Parliamentary Secretary used these words:
The reason why we have to come to the Committee to-night for this Vote may be summed up in one phrase—it is entirely owing to the coal dispute."—[OFFICIAL REPORT, 23rd June, 1921; col. 1677, Vol. 143.]
That is to say, that on account of the coal industry dispute the House is asking the taxpayers to find a sum of £9,000,000. This Estimate only covers the period up to the 18th June. We were told last night that the Estimate was made up to the date on which the miners ballot was taken, it being hoped that that date would put a period to the dispute, and consequently put a period to the liability of the country under these Railway Agreements in respect of costs arising out of the coal stoppage. That hope has vanished. June 18th did not put a period to the dispute. It is still going on, and in voting this sum the House will not be settling its liabilities, but will in due course be confronted by another supplementary Estimate.
It may be said that the Government to-day cannot be held responsible for the Railway Agreements. When they came into office the Agreements were made and the country was liable under them, so
that the Government had nothing else to do but, from time to time, find the sums required to discharge the liabilities arising from those Agreementns. If we were being asked to-day to find nothing but a sum which had arisen in the normal carrying out of these Agreements, I am prepared to admit that no criticism could attach to the Government, and comment on the situation would be superfluous. But that is not the position. While it is true that so far as the Agreements themselves are concerned, the Government is not responsible, yet for the particular situation which has arisen creating a necessity for finding this £9,000,000, I maintain the Government is entirely responsible. That being so, I submit the House is entitled to ask the Government what step is being taken to put an end to the particular liability which arises here. That is the question which the Government has to face, and I repeat it is unfortunate that in such circumstances we are left entirely to such assistance as can be given to us by the Parliamentary Secretary to the Ministry of Transport. I am quite sure when I say that, my hon. Friend will recognise I am not in any sense minimising the importance of the assistance which he can, and does, give to the House. But where we have a liability of millions of pounds, which is also a continuing liability, there should be present the Leader of the House, or somebody who can tell us what the policy of the Government in this matter is going to be. So far from that, the Chancellor of the Exchequer, who was with us up to a few moments ago, has left the House, treating this matter as if it were of no importance whatever. The right hon. Gentleman is the last person from whom such an attitude might be expected. He is charged with the responsibility of raising the revenue to meet this, and one would think his anxiety would be to advance some method of meeting this liability. The Leader of the House is not here either, and we shall have to be satisfied with what can be said by the Parliamentary Secretary to the Ministry of Transport. As I am reminded further, in order to meet this liability some steps will have to be taken beyond raising ordinary revenue. The Government actually has to go out and borrow money at a very high rate, in order to find what
is necessary under this Estimate. This would seem to demand very serious consideration on the part of the House, and I do not think I am occupying time unnecessarily in drawing attention to the situation. Last night hon. Members exhausted themselves in an inquiry into a comparatively small sum, in which intense interest was taken, although it did not amount to more than a few thousands of pounds. Here we have a sum running into millions, and a sum which will go far beyond the Estimate upon the Paper. I may draw the attention of hon. Members to the statements made by the Minister of Transport in the course of a very frank effort to make the position perfectly clear and explain the extent of this liability. He said:
As nearly as I can get it—the Committee I know will treat it as a rough estimate—fit" (the coal stoppage) "is costing about £6,000,000 a month.
The Minister was, of course, dealing with the liability under this agreement, and not with the general cost to the country.
The extra deficiency for April over March was £5,150,000.
That is, comparing the deficiency on railway working in April with the deficiency in March. In the first month of the coal stoppage the extra deficiency under the Railway Agreements, for which the House is liable, was £5,150,000. The Minister also said:
We allow the same sum for May. We allow half the sum for June. That is £13,875,000—it must be a little bit more than that now. The £6,000,000—
I take it this was the £6,000,000 a month to which he had already referred.
—is, directly or indirectly, attributable to the coal stoppage."—[OFFICIAL REPORT, 23rd June, 1921; col. 1699, Vol. 143.]
The real position before the House is that we are not disinterested parties in this matter. Apart from our general interest in the coal stoppage as citizens of this community, we have a special interest as being liable to the country, for expenditure arising in connection with it. We have it from the Minister of Transport that this liability has reached the enormous figure of £6,000,000 per month. It is not necessary to quote any further from the Minister's statement in order to impress the House with the extreme seriousness and gravity of the situation or to give weight to the plea I am making, that the Government should put the House
in possession of some information as to what they are going to do. Are we going to take any steps in order to deal with this situation or is the Government, faced as it is with this liability, merely to remain an idle spectator of the dispute now in progress? The Government might be entitled to take that course and it might be a proper thing for the House to assent in it, if the Government and the House had no responsibility for bringing about the situation which exists. That, however, is not the case. The present situation arises directly from the action of the Government in decontrolling the mines at the time they did. The present situation arises directly from that action. When the case was presented to the House and the House concurred in the decision which was taken, the only grounds upon which the Government based their action were the grounds of relieving the taxpayers from a liability which they were likely to incur under the Mines Act as it stood. Under that Act certain liabilities existed, and unless that were repealed those liabilities would continue, and when the Government came before the House with their proposals for decontrol, it was said that those proposals would save the taxpayers something like £1,000,000 a week or £4,000,000 a month. It was solely upon the grounds of financial relief that the Government asked the House to act, and if I were to suggest that the Government had any other motives and that they were endeavouring to weight the scales on one side or the other of the coal dispute, the Parliamentary Secretary to the Ministry of Transport, I am sure, would repudiate that. That being so, we can see that the Government entirely miscalculated the situation. They were out to save the taxpayers £1,000,000 a week, but what they have succeeded in doing is to land the taxpayers into an expenditure of £1,500,000 a week.

Major MORGAN: On railways only, and another £1,500,000 on the Reserve Forces.

Major BARNES: I agree that the liabilities extend far beyond the railways, but I am dealing at present only with the railway agreements. I would remind the Parliamentary Secretary again of the fact that when the proposals for decontrol were before the House most earnest appeals were put up to the Government, not only
from these quarters, but from all parts of the House, to give a further period in which an opportunity for a settlement might be offered, but they were adamant and obdurate, and they would not give a month or a week, but forced the decontrol on for the date upon which they had made up their minds, and now we see the result. The demand for £9,000,000 is one evidence of it, and that is not the end, as we shall be faced with further Estimates. I submit that in the situation which has arisen we are entitled now to some guidance from the Government as to what they intend to do in this matter. They were reckoning on certain events which have not taken place. They are faced with a new situation and with the prospect of increased liabilities, and it is for the Government to tell the House what they propose to do. I am making a heavy demand upon the Parliamentary Secretary, I know, but I submit that the House is not being treated with the confidence it deserves by the Government in leaving such a matter as this entirely in the hands of my hon. Friend.

Mr. SWAN: This Estimate is absolutely the result of the policy of the Government. We tried to take a long view of what the inevitable result would be of the policy which the Government were pursuing in regard to the financial obligations of the nation, but we were confronted with the guidance of men of extensive business ability and experience, and they counselled the House of Commons that in the best interests of the whole of the nation the mines should be decontrolled. We were advised then by the President of the Board of Trade that, in the event of a total loss to the community, all that the nation would be involved in was approximately £30,000,000, but instead of it working out according to that business and legal advice we find that, as the result of that policy, we have a charge upon the taxpayers of at least £6,000,000 a month, and we were told last night that what the nation is likely to be involved in is approximately £99,000,000 or £100,000,000. If the Government had carried out the findings of the Sankey Commission and had taken over the whole of the mines, they could now have been the property of the community. Now, when we go to our mining areas, and they find that the Government are seeking Supplementary Estimates for the £9,000,000 due to the deficit, what will their state
of mind be? It is likely to make them more hostile and obdurate than ever. In the event of any common people such as we represent being on any local authority or involved in any such business transaction, what would have been the comment of the Press and of business men if we had signed an agreement that, in the event of a strike or lock-out, we would put a charge on the community to make up all the deficit of a normal income? We should be ridiculed and jeered at, and rightly so; but people who had all the brains and the business ability, and who were termed a business Government in the past, have made no preparation for any such exigency, and we submit that the policy of the Chancellor of' the Exchequer when he was at the Board of Trade inevitably led to nothing but this. His policy of turning down and dishonouring the Government's pledges to the miners, and taking sides with the railway magnates and shareholders, is costing this nation not only £9,000,000, but we should think nearer a thousand millions.
We have a criticism to offer to the Ministry of Transport, because we think it has failed to function as the nation expected. We are asked to make a levy upon the taxpayers to the extent of this £30,000,000 and the Supplementary Estimate for work that has never been done for the community. At the General Election the Secretary of State for War told his constituents, and got wide notice in all the Press, that as soon as the Government were returned to power they would nationalise the railways, because they were the life-blood of the nation.

Major MOLSON: Is the hon. Member in order in speaking on the nationalisation of mines and railways?

Mr. SPEAKER: I think the hon. Member sees that himself, and will not pursue such a line.

Mr. SWAN: All I want to say is that had the step been taken which we were persuaded the Government were going to take, we should not have been involved in this charge. We think that the policy which the Government has pursued has led the nation into a paralysis. It is seeking to honour a pledge to one section, who have almost bled the community white, and, on the other hand, it has never made an effort to retrieve its
liabilities to the other section, the mining community. If it had been as loyal to the miners as it is anxious to be to the shareholders of the railway companies, we would have been in a much more prosperous state, and, instead of this House having to meet a Supplementary Estimate, the railways would have been a paying concern, men would have been at work, and we would have retained our markets overseas which we have lost, bringing bankruptcy upon our local authorities and likewise upon the nation.

Sir R. HORNE: I regret more than I can say the unfortunate turn which this discussion has taken. We are now, after twelve weeks of an unfortunate coal stoppage, at the most critical point, when there appears to be a chance of getting a settlement. There are now going on attempts at that settlement, and I for one am desirous to do nothing which by any chance can put an impediment in the way of an agreement being arrived at. There is a complete reply available to me for everything the hon. Gentleman has said. He has presented to the House an absolute travesty of what really is the truth of the matter. To-day I refuse to make the defence which is complete and convincing if made, and I would advise my hon. Friend just to look back upon two or three recent records of what has been happening for a complete refutation of everything he has said to-day.

Mr. SWAN: You cannot do it.

Sir R. HORNE: I shall do it in my own time, but I refuse to-day to embitter a controversy by a single word of mine, and I intend to leave the matter there.

Sir GODFREY COLLINS: The Chancellor of the Exchequer has intervened in the debate this afternoon with an object, which, I am sure, is shared in every quarter of the House, when he stated that negotiations were in progress which, he hoped, might terminate this unfortunate dispute. At a late hour last night, this subject was raised in the House, and no word of comment, no note of interrogation, no word of disapproval was mentioned from the Government Bench. When my hon. Friends, earlier in the course of the afternoon, found that the Finance Bill was passing rapidly through its Committee stage, we thought—and I
think the House will agree with me—that it was a suitable opportunity, at a time when large sums of public money were being voted, for the House for a short time to discuss and face this unpleasant situation. I agree with him, and I am sure every hon. Member on this side of the House has no desire to place any impediment whatsoever, either by any word spoken or by any action taken, to frustrate the desire of the Government. I can only say that the debate this afternoon has not been unfortunate if it has elicited this very important statement thereby giving encouragement to the 3,000,000 or 4,000,000 men who are out of work to-day, and to the traders throughout the country, who are feeling the pressure of economic circumstances. They will gladly appreciate the statement made by the Chancellor of the Exchequer that the Government are intervening, with hope, in this unfortunate dispute.

Sir R. HORNE: One has to be very careful about one's choice of words in this matter. I am not in a position to say the Government is intervening, nor am I in a position to use the phrase my hon. Friend used about negotiations being in progress. But opportunities for negotiation have, in my view, arisen, of which I should like to take the fullest advantage.

Sir G. COLLINS: I have no desire to read into the words of the Chancellor of the Exchequer anything further than the actual words he used, and I will leave the subject accordingly. At a late hour last night the Minister of Transport was asked what economies the Ministry of Transport were effecting in the working of the railways, with a view of avoiding, so far as possible, the heavy burden which is falling on the taxpayers through the present situation on the railways, and the House welcomed the statement that arrangements had been entered into with success between the railway companies and the unions, which mitigated, in some degree, the burden which is falling on the taxpayers. I am anxious this afternoon to press the Parliamentary Secretary a little more on that point. Can he give us any further assurances as to the economies the Ministry are effecting? Take, for instance, the officials in the railway world. The railway servants are receiving to-day a smaller wage than they did six or nine
months ago. Is the same principle being applied in all branches of railway service? Are the men who are drawing monthly salaries being subsidised by the taxpayers, or are they sharing with their less fortunate fellow-servants in the situation in which the railway companies find themselves to-day?
There is one other point I am anxious to put to the Parliamentary Secretary. When the period of decontrol arises at midnight on 14th August, will there be any sudden fall in railway wages? Will there be large numbers of railway men dismissed? Have the railway companies to-day the power to settle these matters themselves? Are their hands tied by the Ministry of Transport? Can they manage their business in their own way? Can they look ahead and show foresight, and by showing it bring the working of the railways into keeping with the amount of haulage which the railways are taking to-day? The House will recollect it was the very sudden drop in wages which brought about the present unfortunate situation in the coal trade. I am entitled to ask the Parliamentary Secretary, therefore, whether or not a similar situation will arise on 14th August? What assurance can we give to the House that the period of decontrol will not put an end sharply and quickly to the present artificial condition? The situation in the coal trade before the period of decontrol started was largely artificial. The coal trade was being supported by subsidies out of the public purse. The same situation to-day exists on the railways. They are subsidised out of the public purse. When that subsidy is removed in August will there be any sudden and violent change in the working of the railways? I hope the Parliamentary Secretary can give some assurances before this Vote is passed that this sudden change will not take place.
The Debate in the House last night showed considerable sympathy with the Parliamentary Secretary. Hon. Members realised his difficulties. They are anxious to assist him as far as possible, and the requests put forward this afternoon are not put forward in any controversial spirit, but with a desire to find out the true situation; to find out what further sums will fall upon the public Exchequer. The total sum in this Estimate is £39,000,000. There is the further £30,000,000, which means that £69,000,000
this year is being taken from the pocket of the taxpayer and passing into the coffers of the railway companies. We have been accustomed to speak in millions in this House during the last seven years, but the sum mentioned in the present figures shows an extraordinary situation. Last night the Parliamentary Secretary informed the committee that his estimate was based upon the supposition that the coal dispute would come to an end on 18th June. We have already passed that stage, and there will presumably be a further liability. I would like to ask the Parliamentary Secretary what he considers will be the total sum required if the dispute continues for a further fortnight, and whether there will be a further Supplementary Estimate for this object at an early date?

Mr. MYERS: It seems desirable to endeavour to get some little information with regard to this figure presented to the House. I confess I have done my best to understand the Estimate, but have not been very successful. We on this side understand that owing to the arrangement made between the railway companies and the Government in 1914, the State was committed to guaranteeing the railway companies their net 1913 receipts. That in round figures was £47,000,000.

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal): No, that is not quite so. My hon. Friend is, I think, confusing the sum paid in dividend with the total net receipt.

Mr. MYERS: In any case, the guarantee was that the railway companies should receive the 1913 net receipts. For several years, up to the end of 1918, the receipts from the railway working was equal to the guarantee, speaking roundly. There was no call made upon the National Exchequer under that head. Now, however, the responsibility of the Government to the railway companies is round about a million per week. The receipts from the railways are partly utilised in order to relieve the Government from that responsibility. Until the receipts come up to that figure there is no liability upon the Government. If there were no receipts at the present time the responsibility of the Government to the railway companies would be round about £1,000,000 a week.

Mr. NEAL: Much more than that.

Mr. MYERS: There are some receipts which at the present time go towards that figure. Last night the Parliamentary Secretary told us that the losses in one direction due to the coal dispute were round about £6,000,000 a month. What I would like to understand, and I am sure many of my colleagues are in a similar position. Under what heads are these losses incurred apart from the guarantee to the railway companies? If we paid the railway companies their 1913 net receipts the losses, I think, would not be as great by a long way to the State as is probable according to the evidence of the figures presented by the Parliamentary Secretary. We are anxious to know what are the liabilities of the State to the railway companies, and how long they are likely to continue?

Major MORGAN: It is with some reluctance that I rise to offer a few words in regard to the situation generally. The Chancellor of the Exchequer came into the House for a very short while, and attempted to deliver a lecture to us because we wanted some knowledge as to the charges arising in connection with the railways. I want to say at once that no words will fall from my lips to suggest that the Minister of Transport and the Parliamentary Secretary have not done all they possibly could; but we on this side do resent the growing practice in this House of Ministers affected by questions which may be raised not troubling to come into the House, and the moment we try to put a helpful question to get at the root cause of the trouble, being told that it is unfortunate to discuss a situation that is being allowed to drift. We are now in the 13th week of it. I am not disposed to go into the total cost, but I venture to say for the month of June altogether we shall not be discussing merely the loss of 1½ millions per week. If this dispute be allowed to go on and not seriously tackled our losses will increase day by day. I do not think I should be far wrong in saying that by the end of June we shall be asking for something close upon £2,000,000 a month to deal with the railways alone.
The hon. Member said he thought it was the duty of some of the Ministers to be present to put us in possession of whatever new information could be obtained, because when we go back to our constituents, and especially those of us re-
turned in the main by the coal miners, they will want to know what steps are being taken to reduce the vast losses that, are being incurred, and for which the money will have to be found by the taxpayers. It is all very well for the Chancellor of the Exchequer to say the moment we begin to discuss this situation that we are likely to jeopardise the negotiations which are going on. It is cant. If the, Chancellor of the Exchequer had remained away altogether from the coal question, I think this House would never have needed to discuss the question at all, and that is the way he treats the House on this very important question. [An HON. MEMBER: "He has walked out!"] Yes, after he has given us a lecture telling us that we are not to discuss this question at all.
I do not propose to go into the figures, but I want to say that this practice of Ministers treating the House in this way ought to cease, and they ought to be present, because they have misrepresented the situation as far as the coal trade is concerned from beginning to end. We asked the Government last February in regard to decontrol what they were going to do, and since then they have landed us into the present situation. We are now in the thirteenth week of a coal stoppage which will land the country into a little short of £100,000,000 in losses as far as the railways, the coal mines, and other industries are concerned. I think we ought to receive better treatment from Ministers of the Crown, because it is our duty to show that there is still some interest in this House with regard to this important and essential question.

Dr. MURRAY: In view of the remarks which the Chancellor of the Exchequer made in criticising the speech of my hon. and gallant Friend the Member for East Newcastle (Major Barnes), I cannot allow this opportunity to pass without entering a protest against the growing practice of Ministers lecturing us, and saying when a question is inconvenient for them that things are in such a delicate situation that it is dangerous for the House to meddle with the question at all. I have the greatest respect for the Chancellor of the Exchequer, but I object to this lecturing of hon. Members, because in reply to our criticism the right hon. Gentleman himself gave us an announcement of a most
important character which he should have been down here to announce to the House and the people who are panting for information of this kind. Instead of that, the right hon. Gentleman comes here like a butterfly just for a moment, and in a casual sort of way gives to us an important announcement of this sort and through this House to the nation. I do not think that either the nation or the House is being respectfully treated.
Before we heard of the rather nebulous condition of these negotiations, the House was discussing both last night and to-day the connection between the effect of the coal stoppage on the Vote we are at present discussing. It is a serious thing that the country should be burdened with a condition of things which compels the House to guarantee a certain sum of money to the proprietors of the railways of this country, while at the same time the Government is in a position, either by muddling or mishandling the coal situation, to bring a tremendous additional burden under the railway guarantees. It is impossible to discuss this Vote without debating the coal situation. My hon. and gallant Friend deserves the thanks of the House for pointing out the connection between the coal policy—I do not know that it would be successful even if angels had to deal with it—and this Vote, but it has not been a success owing to the fact that there are two parties, one of them anxious to have a fight to a finish and the other party want conciliation. The Chancellor of the Exchequer has been no longer in this House than I have, and I do not think he is entitled to come here and lecture us.

Mr. NEAL: It would obviously be improper for me to say anything in reference to the coal situation after the announcement which has been made by the Chancellor of the Exchequer. For that reason I do not propose to pursue that subject. There are certain important questions which have been addressed to me by my hon. and gallant Friend the Member for Greenock (Sir G. Collins) which call for a specific and a direct answer. The hon. and gallant Member for Greenock and the hon. and gallant Member for East Newcastle (Major Barnes) are both perfectly familiar with the agreements under which this Vote arises, and I think I shall have the assent of both of them when I say that the present administration has no responsibility for those
agreements further than to state that it is our duty, to recognise the obligations of the State and to give effect to them. I would like in connection with this question to say that but for the intervention of my right hon. Friend the Minister of Transport bringing these liabilities to an end in August next, control of the railways would have had to be continued for a further period of at least two years, namely, two years after the con elusion of the War. It is a matter of gratification to every hon. Member of this House that there is an end in view to the whole of the Government liabilities in this respect.
Fortunately in the course of the Debate last night and again to-day there has been no criticism addressed directly to the Ministry with reference to the Vote which I had the honour to submit to the Committee yesterday and again to-day. The questions which were put by the hon. and gallant Member (Sir G. Collins) I will endeavour to answer. He asked whether there was some reduction in the wages of the railway officials commensurate with the reduction which has been made with reference to the workmen. The answer to that question has been given once before in this House, but I give it again, though I do not think it is quite as germane to this Vote as some other observations which fell from my hon. and gallant Friend. There has been no reduction made in the wages of the workmen upon the railways during this coal dispute—I am not quite sure whether there has been a reduction automatically under the sliding scale—nor has there been any difference whatever between the Government as representing the taxpayers and the unions as representing the men. Under the agreements as they subsisted, the men were guaranteed a full week's work so long as they remained in the service, but it was quite open to the railway companies to have given notice to reduce their staff and to have put a number of men on the unemployment list. That would have been inevitable, because it is obvious that there is much less work for the ordinary workman on the railways while train services are reduced as they are to-day. The men, however saw the wisdom—I commend them for it—of distributing the wages among the men by reducing the time during which they work, so that there might be
none left totally unprovided for, and that they might normally resume their position and full pay when the period of stress had ceased.

Major MORGAN: It is true to say that they work three days per week and that they had only suffered reductions due to each fall of five points in the cost of living.

Mr. NEAL: I would not like to pledge myself to the precise details of reduction, but it has been on the lines of short time rather than dismissal. When that question is applied to the officials, a totally different state of things arises. During times of anxiety and strain such as at present, the duties of the officials are not less; they are rather increased. Those who are responsible for the running of the trains and the regulation of the services have much greater difficulty in trying to adjust the services than they have in normal times. Therefore, so far as I know, nothing has happened with reference to them. My hon. and gallant Friend put more pointed and cogent questions to me with reference to what will happen as from 15th August. He asked whether the Government anticipated a sudden drop in wages to be sought by the railway companies, which might produce the same disastrous paralysis as obtains in the mining industry. Everything that human foresight can do to prevent that has been done with the goodwill of the railways and of the men. There is at present in existence an arrangement under which wages disputes are considered by a joint body of masters and men, and, if they fail to agree, they are carried over for consideration by a mixed tribunal. There is embodied in the Railway Bill the terms of an agreement come to between the railway companies and the men, whereby the functions of those bodies of arbitrators or tribunals continue until some permanent organisation is set up. I am happy, therefore, to be able to assure my hon. and gallant Friend that there is not the slightest reason, as far as one can humanly foretell, to fear that there will be any disturbance or dislocation at the end of the period of control.
He also asked me whether the companies were now in a position to manage their own business, and whether they would be quite free to do so at the end of control. That opens up a large field. The companies have really been
managing their own business right through the period of control. It is one of the criticisms which was addressed by my hon. Friend, the Member for the Holland Division (Mr. Royce), last night, that the Government's control had not been sufficiently tight and effective, but that there had been freedom from control. There is, per contra, the interrogatory criticism of my hon. and gallant Friend on the Front Bench (Sir G. Collins), when he asked me whether they would be free to manage their own business, and, in particular, to negotiate with their own men. Certainly, the interference of His Majesty's Government with the railways has been of an extremely slight character, except so far as regards wages, hours, and conditions of work are concerned. It was pointed out that these agreements involved the State this year in payments at present estimated at no less than £69,000,000. That is perfectly true. One consolation is that we hope that we now see the end of it. The Minister made efforts in that direction before by authorising an increase of rates and charges, but there intervened conditions which could not have been foreseen, namely, acute trade depression and this disastrous dispute in the coal trade. Unfortunately, these charges do come upon the country, but £30,000,000 is part of the £60,000,000 which is to get rid of outstanding claims which potentially were estimated by the Committee presided over by Lord Colwyn and of which my hon. and gallant Friends were members at £150,000,000, with possible claims over and above that sum. We are getting rid of those claims by the payment of £60,000,000.
My hon. Friend, the member for Spen Valley (Mr. Myers) invited me to explain the exact position of the figures relating to the guarantee for 1913. What was guaranteed to the railways, apart from the subsequent agreement as to deferred maintenance of stores and matters of that kind, was the net revenue on certain items—the traffic items principally—for the year 1913. Those items, of course, include the sum distributed in dividends during that year, and, speaking from recollection, I think that was something like £47,000,000. Those obligations still continue to make up the net revenue, and it is because there is a decline in the net revenue, owing to trade conditions, aggra-
vated by the disastrous stoppage in the coal industry, that we have to come today with this Supplementary Estimate. I trust that I have covered all the points, and I shall be grateful if the House can now see its way to come to a decision.

Mr. HAYWARD: The Parliamentary Secretary, in his speech, disclaimed responsibility on the part of the Government for those losses arising out of the strike. I am not at all sure that the Government can disclaim responsibility, and I say so advisedly. The hon. member will agree at least that the Government is responsible for fixing the termination of the present control as at the end of August this year by the Transport Act. The hon. Gentleman said that when they came into office they found existing agreements under which the State would remain liable for a period of two years after the termination of the War. That time, as he truly said, has not yet arrived, and therefore under the agreement the railways would have had two years from a period which has not yet arrived. That is perfectly true, but the fixing of the period for the termination is something which is and always has been in the determination of the Government. When the Armistice came, in November, 1918, it was quite open to the Government to have got through the necessary Order in Council terminating the War for any particular purpose, and it showed a great want of foresight on their part when, knowing they had in view these continuing liabilities, they failed to take the necessary steps by Order in Council to terminate the War for such a purpose as this. It could have been properly done. It should have been done, and it is entirely owing to the lack of foresight on the part of the Government in not doing it that the country is now saddled with this enormous burden.

Mr. LAWSON: The effects of the great industrial struggle which has gone on during the last three months are apparent not only in the discussion in this House, but on the Estimates which are now being brought before it for consideration. It is especially so in connection with the Railway Estimates. I understand the Chancellor of the Exchequer to-day has asked the House not to discuss this matter in view of the very delicate situation that has arisen. That is a sort of statement which we are now becoming accustomed
to in this House in regard to the coal struggle. It seems to me that it is the duty of the House to discuss matters like this. It is a tragedy almost unparalleled in industrial history that a million workers in this country, with four million dependants, and affecting besides millions of other workers by reason of the struggle in which they are engaged, should be asking for a certain thing while this House, which is supposed to represent the community, seems to be almost entirely ignorant of the real aspirations and real claim of these people. We have had this question put from various points of view. Sometimes we are told that the Leaders have misled the workers.

Mr. DEPUTY-SPEAKER (Mr. James Hope): I am sorry to interrupt the hon. Member, but I would remind him that I ruled yesterday, when in the Chair in Committee, that it was not in order on this Vote to debate the merits of the coal stoppage. Since then I have been fortified in my opinion by Mr. Speaker. It is obvious that otherwise the ramifications of the Debate might be enormous. Part of this money is required on account of the trade depression, and it might be argued that the Government ought to have stopped the trade depression by stabilising the foreign exchanges. It would be quite in order to criticise the Government for their policy of decontrol,

but to discuss the merits of the coal stoppage is not in order.

Mr. LAWSON: I can only repeat that this matter ought to have been discussed from time to time by this House. The day has gone by when we should be told that the situation is too delicate for the House to discuss it. The truth is the House and the country are in complete ignorance of the real causes of the dispute, and the sooner we get down to discussions of the question the better it will be for the country and for everybody concerned. That is all I want to say. It has been suggested that I should move a reduction of the Vote. I do not wish to do that, although it might afford an opportunity for securing a full debate on this matter, but I do hope I may be allowed to express the hope that, in future, the Government will keep the House informed stage by stage of all that is going on in this matter, so that we may have an opportunity of discussing the very grave crisis through which the country is passing, and will continue to be passing until the representatives of the people are allowed to express themselves freely and frankly on the situation.

Question put, "That this House doth agree with the Committee in the said Resolution."

The House divided: Ayes, 132; Noes, 30.

Division No. 197.]
AYES.
[2.1 p.m.


Amery, Leopold C. M. S.
Elliot, Capt. Walter E. (Lanark)
Jameson, John Gordon


Ashley, Colonel Wilfrid W.
Eyres-Monsell, Com. Bolton M.
Jodrell, Neville Paul


Bagley, Captain E. Ashton
Evans, Ernest
Johnstone, Joseph


Baird, Sir John Lawrence
Falle, Major Sir Bertram Godfray
Jones, J. T. (Carmarthen, Llanelly)


Baldwin, Rt. Hon. Stanley
Fell, Sir Arthur
Kellaway, Rt. Hon. Fredk. George


Balfour, George (Hampstead)
Fildes, Henry
Kelley, Major Fred (Rotherham)


Banner, Sir John S. Harmood-
Ford, Patrick Johnston
King, Captain Henry Douglas


Barnston, Major Harry
Forrest, Walter
Lewis, Rt. Hon. J. H. (Univ., Wales)


Bellairs, Commander Carlyon W.
Fremantle, Lieut.-Colonel Francis B.
Lloyd-Greame, Sir P.


Bennett, Sir Thomas Jewell
Gardiner, James
Lorden, John William


Bigland, Alfred
Gardner, Ernest
M'Curdy, Rt. Hon. Charles A.


Birchall, Major J. Dearman
Gee, Captain Robert
Macdonald, Rt. Hon. John Murray


Blades, Sir George Rowland
Gibbs, Colonel George Abraham
Macnamara, Rt. Hon. Dr. T. J.


Borwick, Major G. O.
Gilmour, Lieut.-Colonel Sir John
Mitchell, William Lane


Bowyer, Captain G. W. E.
Goff, Sir R. Park
Molson, Major John Elsdale


Breese, Major Charles E.
Green, Albert (Derby)
Moore, Major-General Sir Newton J.


Buchanan, Lieut.-Colonel A. L. H.
Green, Joseph F. (Leicester, W.)
Morison, Rt. Hon. Thomas Brash


Buckley, Lieut.-Colonel A.
Greene, Lt.-Col. Sir W. (Hack'y, N.)
Morrison-Bell, Major A. C.


Burn, Col. C. R. (Devon, Torquay)
Hacking, Captain Douglas H.
Munro, Rt. Hon. Robert


Butcher, Sir John George
Hambro, Angus Valdemar
Murray, C. D. (Edinburgh)


Cautley, Henry Strother
Hannon, Patrick Joseph Henry
Murray, John (Leeds, West)


Clough, Robert
Harmsworth, C. B. (Bedford, Luton)
Neal, Arthur


Cobb, Sir Cyril
Harris, Sir Henry Percy
Newman, Sir R. H. S. D. L. (Exeter)


Colfox, Major Wm. Phillips
Henderson, Major V. L. (Tradeston)
Nicholson, Reginald (Doncaster)


Colvin, Brig.-General Richard Beale
Hennessy, Major J. R. G.
Norton-Griffiths, Lieut.-Col. Sir John


Cope, Major William
Henry, Denis S. (Londonderry, S.)
Palmer, Brigadier-General G. L.


Cory, Sir J. H. (Cardiff, South)
Hewart, Rt. Hon. Sir Gordon
Parry, Lieut.-Colonel Thomas Henry


Davies, Thomas (Cirencester)
Hickman, Brig.-General Thomas E.
Pearce, Sir William


Denniss, Edmund R. B. (Oldham)
Hope, Sir H.(Stirling & Cl'ckm'nn,W.)
Pease, Rt. Hon. Herbert Pike


Edgar, Clifford B.
Hopkins, John W. W.
Peel, Col. Hon. S. (Uxbridge, Mddx.)


Edge, Captain William
Horne, Sir R. S. (Glasgow, Hillhead)
Perring, William George


Edwards, Major J. (Aberavon)
Hunter, General Sir A. (Lancaster)
Pratt, John William


Edwards, Hugh (Glam., Neath)
Hurd, Percy A.
Rae, H. Norman


Rawlinson, John Frederick Peel
Smith, Sir Allan M. (Croydon, South)
Tryon, Major George Clement


Rees, Capt. J. Tudor- (Barnstaple)
Smith, Sir Harold (Warrington)
Waring, Major Walter


Richardson, Alexander (Gravesend)
Smithers, Sir Alfred W.
Williams, C. (Tavistock)


Roberts, Samuel (Hereford, Hereford)
Stanley, Major Hon. G. (Preston)
Willoughby, Lieut.-Col. Hon. Claud


Roberts, Sir S. (Sheffield, Ecclesall)
Steel, Major S. Strang
Wise, Frederick


Robinson, S. (Brecon and Radnor)
Stevens, Marshall
Wood, Hon. Edward F. L. (Ripon)


Samuel, A. M. (Surrey, Farnham)
Stewart, Gershom
Wood, Sir H. K. (Woolwich, West)


Sanders, Colonel Sir Robert Arthur
Sturrock, J. Leng
Worthington-Evans, Rt. Hon. Sir L.


Scott, A. M. (Glasgow, Bridgeton)
Surtees, Brigadier-General H. C.
Young, E. H. (Norwich)


Seager, Sir William
Taylor, J.



Shaw, Hon. Alex. (Kilmarnock)
Thomson, Sir W. Mitchell- (Maryhill)
TELLERS FOR THE AYES.—


Shortt, Rt. Hon. E. (N'castle-on-T.)
Thorpe, Captain John Henry
Colonel Leslie Wilson and Mr.




Parker.


NOES.


Acland, Rt. Hon. Francis D.
Hayward, Evan
Polson, Sir Thomas A.


Barnes, Major H. (Newcastle, E.)
Hodge, Rt. Hon. John
Royce, William Stapleton


Cape, Thomas
Hogge, James Myles
Sueter, Murray Fraser


Collins, Sir Godfrey (Greenock)
Holmes, J. Stanley
Waterson, A. E.


Galbraith, Samuel
Kenyon, Barnet
Wedgwood, Colonel Josiah C.


Glanville, Harold James
Kiley, James Daniel
Williams, Aneurin (Durham, Consett)


Graham, D. M. (Lanark, Hamilton)
Lawson, John James
Wood, Major M. M. (Aberdeen, C.)


Graham, W. (Edinburgh, Central)
Lowther, Major C. (Cumberland, N.)



Grundy, T. W.
Morgan, Major D. Watts
TELLERS FOR THE NOES.—


Hartshorn, Vernon
Murray, Dr. D. (Inverness & Ross)
Mr. C. White and Mr. Swan.


Hayday, Arthur
Myers, Thomas



Question, "That this House do now adjourn," put, and agreed to.

PUBLIC ACCOUNTS COMMITTEE.

Ordered, "That Lieut.-Colonel Sir William Allen be a member of the Committee."—[Colonel Gibbs.]

BUSINESS OF THE HOUSE.

Motion made, and Question proposed, "That this House do now adjourn."—[Colonel Leslie Wilson.]

Mr. HOGGE: I do not know why my hon. and gallant Friend has moved the adjournment of the House, in view of the fact that there is on the paper the Land Nationalisation Bill, in which some of us are extremely interested, and also the Dogs Protection Bill, which has been on the Order Paper to my certain knowledge for the ten years during which I have been in Parliament. Now that we have three hours of Parliamentary time at our disposal, I am astonished that my hon. and gallant Friend, whose interest in these matters is well known, should attempt to deprive us of the opportunity of continuing the discussion upon them. There is also a third very important Bill, the Declaration of Rights Bill, which deals with the matter, manner, measure and time in respect of which taxes shall be levied, and which raises the large question of the authority of this House over the finances of the nation. While I do not desire personally to occupy the time of the House, I would remind my hon. and gallant Friend that he himself was not content with the suggestion we made that we should not need to sit after five o'clock, but went the length of dividing the House in order that we might sit
after five. For the moment he was a con-scriptionist, compelling us to sit after five o'clock in order that the Government should get through its work. Does he not think it unfair, now that we have this amount of time, that we cannot proceed with those discussions? I know what may happen if we attempt to proceed. My hon. and gallant Friend, who sent out a two-line Whip to bring down all his followers at twelve o'clock for the purpose of sitting after five, will allow the House to be counted out, and we shall have another exhibition of Coalition tactics inside the Coalition—on the one hand an appeal to us to remain, and on the other an appeal to us to disperse.
I do not know that I want to say anything more, except that while I think I know the House of Commons well enough not to run counter to its spirit, I feel that it is asking a great deal of us when, in the one case, we are asked to sit beyond 5 o'clock—which, on a Friday, may, of course, mean an all-night sitting—and then when, owing to the circumstances of the Debate, we do have a little time, my hon. and gallant Friend does not give those of us who have that time the opportunity of making use of it. I do not know whether anyone interested in the Land Nationalisation Bill or in the Dogs' Protection Bill is present, but some of us are very much interested in the Declaration of Rights Bill, of which the Government themselves are in favour, and which the Financial Secretary to the Treasury ought to be extremely pleased to see receive a Second Reading.

Notice taken that 40 Members were not present; House counted, and, 40 Members being present—

Mr. HOGGE: I am indebted to the hon. and gallant Gentleman (Colonel Wilson) for realising the importance of my remarks by insisting that the Government whips should maintain a House, in order to listen to what we have to say. Before my hon. Friend the Member for the Western Isles (Dr. Murray) desired that I should no longer be heard I was about to say I have practically said all I wanted to say to make the point that on a Friday afternoon, when we had come here for Government business, and we find ourselves in possession of another 2½ hours of Parliamentary time, it is rather hard luck on private Members who have private Orders down that they do not get an opportunity of moving them. If the hon. and gallant Gentleman had allowed Nos. 6, 7 and 8 to be read out before he moved the Adjournment he would have saved time in the long run and have afforded the private Member of the House the privilege he is entitled to.

Colonel LESLIE WILSON (Joint Parliamentary Secretary to the Treasury): As the hon. Member knows well, and as the Chancellor of the Exchequer explained, there was every likelihood that the Debate on the Finance Bill would run until at least 5 o'clock, but, for the reasons which he has explained, it has not done so. The hon. Member for East Edinburgh (Mr. Hogge) says I should not have moved the Adjournment, but gone on with the Orders on the Paper. Only the other day I tried to take some Orders on the Paper of which notice had not been given. I see the hon. Member who put down the Land Nationalisation Bill is not in the House, my right hon. Friend the Member for the City of London (Sir F. Banbury) is not in the House, and the hon. and gallant Member for Leith (Captain W. Benn), who introduced the Declaration of Rights Bill, is not in the House, and I thought it would be very unfair to take those Bills. As we sat up very late the other night, and lost a good deal of sleep, I suggest that we might go out this afternoon, and enjoy some of the sunshine. Therefore I urge that the House should agree to the Motion for the Adjournment.

Mr. SWAN: We really expected we had a long evening before us, and I am sure
if we had had a House, the Land Nationalisation Bill would have given us a wide scope for discussion and we might have been able to hammer some ideas out of real benefit to the nation. The Prime Minister made an eloquent speech nine months ago as to one of the most urgent and pressing needs of the nation, and the large number of men who were out of work, and suggested ways and means whereby they might be usefully employed supplying the nation's needs in food, and so on. He said our land was the most fertile in Europe and if it was employed we should not have to import over £500,000,000 worth of food and be dependent upon other nations for that precarious supply, and in the event of a great national crisis we might be absolutely independent of other nations. Such a Bill as we have here would give us an opportunity of taking over the land and working it for the benefit of the nation. Apart from the fertile land we have all kinds of mineral wealth and we ought to have a full opportunity on an afternoon like this of discussing ways and means whereby the hills which are laden with all kinds of wealth which are so urgently required by the community might be exploited to supply our industrial needs. Men might be earning wages, adding to the nation's wealth and creating a land which would be prosperous and independent of all others in the world, instead of being a charge on taxes and rates. I have made approaches to the Ministry of Transport and the Board of Trade, but we can get no co-ordination with any of these Departments so that these resources might be utilised. We have men out of work, but at our very door are the means whereby we can find them useful employment. We have hills laden with limestone, iron ore, ganister, lead, gold and coal. Why cannot we get our men employed so that they will be producing for the nation's need? Because there is no co-ordination between the Board of Trade and the Ministry of Transport.
When this Parliament was elected grand ideas were put before the community and no acre of land was to be left idle. Instead of having our men overworked, under-paid, ill-fed and ill-housed, all these grandiose schemes were going to be initiated; we were going to have railways constructed, the land exploited, men placed upon it supplying the nation's needs, and also there was to be co-ordina-
tion with the Chancellor of the Exchequer so that the money we had been wasting would be usefully spent. The Minister of Transport admitted that there were here opportunities for the development of industries, the employment of men and the cultivation of land, but he said that the Department responsible was the Board of Trade. They would not move. If they had made inquiries they had given no instructions to the Ministry of Transport so that the railways might be made. When we criticised the lack of co-ordination between the departments and their indifference to the waste of national wealth we were told that the money which was at the disposal of the Ministry of Transport, so that we might solve these social, economic and industrial problems, had been taken away from them. The Prime Minister told us that if we were to be an A1 population we must revise our transport system so that the people could get from the slums into the country. Nothing has been done in that direction and towards building up an A1 population. When we discussed this question a Noble Lord said that we could not afford an A1 population. A strange commentary on the statement of the Noble Lord was that in order to save finance we must keep a C3 population. On that same day, a large company decided to increase its capital in London by £1,000,000, and within twenty-four hours £7,000,000 had been contributed, and each post teemed in further offers. Yet we were told that there was no money in the country to initiate schemes of reconstruction and to carry out the pledges which the Government had given.
The Members of the Labour party desire to utilise the resources of wealth which are at our disposal rather than to have Bills brought in giving unemployment grants. We want to initiate schemes which will have the effect of providing work for our people under conditions which will enable them to provide for their families, and when their day's work is done to have leisure and recreation. If the land of the country were developed as it ought to be, we could produce material wealth instead of having to import so many raw materials from abroad, and by producing the material wealth at home we should find work for our people. We have rivers running to waste, and no effort being made to
harness them and to provide the nation with heat, light and comfort, or to establish dynamos and transmission lines. Instead of that they are undeveloped, and in my part of the country many people have to rely upon lamps, candles and oil for lighting and heating. At the same time we find men standing in the market place willing to work, but idle because there is no work for them to do. If a Labour Minister was in charge of the Ministry of Labour he would not spend his time bringing in Bills for giving unemployment doles. He would say: "Here is work to be done. Here is a place where men may be usefully employed," and he would adopt means for getting the men to work. We have skilled engineers and electricians standing idle when they might be harnessing the waters and laying down the transmission lines. Developments in these directions, however, are prevented because of private interests in the land. If a Bill such as the Land Nationalisation Bill had been placed upon the Statute Book all the obstacles which stand in the way of development of the resources of the nation would be swept away.
We are told by the Government that we cannot get on with this scheme or that scheme for the national welfare because there are no funds. They would rather have 3,000,000 men out of work than harness the powers at their disposal and utilise our labour power and our trained knowledge. Many of us are interested in education, and we appreciate its value for others because we have not had an opportunity of getting much education ourselves. We want our people to be trained in elementary and technical knowledge so that they can use their knowledge for the benefit of the community. Orders go forth that expenditure upon education must be curtailed, while, on the other hand, we find the Government squandering millions in Ireland or in Russia, suppressing the liberties of the people. They always find the ways and means of getting money for ventures of that kind. Instead of pursuing such a policy, we hope that a new spirit will come to the Government which will create a better atmosphere in the nation and bring into force the spirit which prevailed during the War. When we wanted shells during the War we quickly put up factories. We ought to tackle the problems of peace time in the same determined way. There is a crying need for coal. We are told that there is
to be a great shortage of coal, and that we shall need to get coal from France and Germany, although we have unlimited coalfields in the country. We have also great numbers of men who could be set to work if it were not for the difficulties created by landlordism.
We are not out of danger yet. There is as much need to-day as there was at any time during the War to save the nation from perishing. Unless a spirit of this description prevails and the waste of our resources is prevented, and we set ourselves to the work of reconstruction, the whole of our Western civilisation may be swept into oblivion. I hope that a new policy will be initiated by the Government, and that instead of trying to crush the spirit of freedom of the Irish people they will initiate a policy which will win them to us and secure their co-operation. When this policy is applied to Ireland we hope that there will be a restraining influence in the other House. We sent a messenger of peace to Ireland this week, but at the same time in another House a Noble Lord said that the Government had come to the conclusion that the only way to extirpate the evils of Ireland was by force. We must not pursue such a policy. We can win them only by such a spirit as was expressed in the speech of the King, and we cannot extirpate their desire for freedom by coercion. Let our land and our mines be utilised for the benefit of the country. If the mines are mismanaged by a certain section, that section should be eliminated, and land and mines should be used for the benefit of the whole country, and have production for use instead of profit.

IRELAND.

Mr. WATERSON: I am pleased to notice the entry of my hon. and gallant Friend the Member for Leith (Captain W. Benn), but I am afraid that if he takes part in the Debate to-day, he will be sorry that he missed his opportunity, because the Bill to which his name is attached could not get a Second Reading. I am sorry that I have not had an opportunity of communicating with the Chief Secretary about a matter in which I am particularly interested. Hon. Members will be aware that, by questions supplementary to questions asked in the House, I have been endeavouring to find whether the Government are adopting a certain policy in reference to creameries in Ire-
land at the present time, and I am now-afforded an opportunity of raising the matter so that the British public may know exactly what is taking place. I do not know whether the Chief Secretary is within the precincts of the House. If he is I would like him to be present while I raise this matter. Part of the present policy of the Government in Ireland is the closing of certain creameries in the Martial Law area. The reason given by the Government is that the people in charge of the creameries who are responsible for their management are not keeping in order the roads in the districts in which the creameries are placed. When one reads the Irish newspapers and the English newspapers one is led to believe that the cutting up of these roads is not, generally speaking, done by what is known as the Irish Republican Army, but in many cases it is done by what are known as flying columns of His Majesty's forces, and when they are performing work of this character it is hardly fair to assume that those in charge of the creameries are responsible. But how can people in charge of the creameries protect these roads? The policy of the Government is such that anyone who does not happen to be a member of the Crown forces who is found in possession of arms is liable to great punishment. If these men in charge of creameries were found with arms in their possession, ready to take every step possible to protect these roads, even by force of arms, they would be arrested at once by the Government and would probably suffer the penalty of death. Another crime, according to the Government regulation, is to be out after curfew hours. How can these people, who in broad daylight are unprotected, so far as arms are concerned, prevent people from doing wanton damage to these roads?
Apart from the question of who is responsible for these roads, the closing of these creameries is a wasteful and foolish policy. I am glad to see that the Attorney-General for Ireland has come into the Chamber. I know that he is sympathetic to us who put the opposite point of view. I have in my mind one particular creamery that is dealing with 6,000 gallons of milk a day. The Government have deliberately closed that creamery at exceedingly short notice. The managers of the creamery have had no opportunity of arranging for the dis-
tribution of the milk, of which the children in the area are in need. We in this country also are going short of supplies because of the Government's action. The managers of the creamery have not had time even to remove the stocks of cheese and butter, and those stocks are going to rack and ruin. It may be said that it is not the duty of the Government to arrange for the delivery of the milk in that or in any area. What was done in this country when there was the prospect of a big industrial dispute? Was no action taken by the Government to see that the people were fed and that milk was supplied to the population? If it was right to take such action in England it must be equally right in Ireland.
The closing of creameries will not assist the country. It will create disaffection; it will increase the mistrust existing among the people; it will embitter those who take moderate views and are in favour of constitutional methods. It blocks the way to the avenue of peace. There is a cause of complaint also as to the application of orders in the martial law areas. Authoritative persons have informed me that when an order has been given in a martial law area for the closing of creameries, preferential treatment has been shown in the application of the order; in other words, the order has been applied to one creamery and not to another which is perhaps only 200 yards distant. In one case there was a co-operative creamery managed solely in the interests of small farmers in the neighbourhood, but another creamery which was allowed to keep its doors wide open happened to belong to private enterprise. Why make such a distinction against the creamery run on a co-operative basis? We are constantly being told that industry ought to be encouraged to the fullest possible extent and that there never was a time when industry needed rehabilitating more. A revival of trade is essential for the nation's well-being, but in Ireland the avenue of industry is being closed and the Government is creating, not only hardship, but unemployment. Moreover, the Government's action is forcing unemployment on people in this country who are entirely dependent on a particular industry in Ireland. Is that the Government's intention? I appeal to the
Attorney-General for Ireland to give greater consideration to this matter and I hope I shall not appeal in vain.

Mr. C. WHITE: I sympathise with the Government in their desire to adjourn. I wonder that they have survived this week, considering how many hard knocks they have received, and I am certain the members of the Government, after such a strenuous time, need an opportunity to recuperate both morally, spiritually, physically and mentally. While I admire the eloquence of the hon. Member for Barnard Castle (Mr. Swan), and while I hope it will be a long time before he gives us his swan song in this House, I am in sympathy with the desire felt by the Government to study agriculture outside, instead of the political situation inside the House of Commons. I am not an orator, but while the House of Commons, on a Friday afternoon, is a splendid training place for budding orators, I do not intend to take advantage of it. I judge matters by results, and I do not know what good result will accrue from talking this afternoon. Even if we could force a Division on any subject we would be defeated as we usually are. Therefore, I say let us go out and enjoy some of the sunlight which we are usually debarred from having. I beg, therefore, to support the Adjournment of the House and for the first time in my life I support a Government which does not deserve support because of its sins both of omission and commission.

3.0 P.M.

Mr. LAWSON: I was rather surprised at my hon. Friend supporting the Motion for Adjournment after the eagerness which was shown so recently to sit up all night, and discuss other questions. I cannot understand why, at a time in the history of this country when its industrial and political affairs are in such a critical state, we should adjourn in the middle of the day, despite the attraction of the sunshine outside. I desire to follow the hon. Member for Kettering (Mr. Waterson) on the question of the closing of creameries in Ireland. Speaking the other night on a strictly limited motion I said while I disagreed fundamentally with the policy of the Government in Ireland, I thought it would be much better if they had some consistent policy from their own point of view and if they employed disciplined forces and a responsible head in carrying out that policy rather than have the present state of things prevailing in
Ireland. The present Dublin Castle rule is one of the bloodiest and foulest things in human history, and I can say that, as one who has seen some of its work at first hand. We have heard recitals in this House of its activities day by day and of the terrible things which are happening under its régime. The hon. Member for the Falls Division yesterday gave us an instance of the kind of thing which takes place night after night when he told us of two young men—brothers—being torn away from their home, walked along the street barefooted and scantily clad, stood up against a wall and shot and left lying there. Yet the hon. Gentleman who represents the Irish Office tells the House and the country that they have no information as to who the murderers are. I now come to deal with a specific instance, for which the Government knows its forces were responsible and which the Government has allowed to drift. When revelations were made concerning it the Government was compelled to hold a military inquiry, and now in order to cover its own representatives, the Black and Tans, it tells the House that it has not yet received information as to the actual result of the inquiry. I am dealing with the case of the burning of the creamery at Ballymacelligot in November last; the shooting of two men there; the disgraceful treatment of a nurse who rendered good service to this country during the War, and a robbery which took place. I wish to place the full facts before the House and the country in order that they may judge for themselves of the actual deeds perpetrated by the hired assassins of the Government and of the Irish Office. I am speaking of an incident which I assisted to investigate on the spot a fortnight after it occurred. On 11th November last a body of men were standing at Ballymacelligot creamery when suddenly there rushed up a party of the Auxiliary forces, who immediately commenced firing into the midst of these men. On the same evening they returned and arrested several of the men. The following day they burned the creamery, but in the meantime a series of incidents occurred, including the taking of the nurse's property and of notes to the extent of £100, and the burning of her mother's and brother's ricks. What was the reply given in this House to a question based upon those facts? The
Chief Secretary for Ireland replied on the very same evening when he declared they were tracking down these murderous forces, and he told the House that innocent men had been fired at from an ambush party hidden in the creamery. He declared the manager of the creamery was a well-known rebel, and when asked if the manager had been arrested, he said "Yes." When I was there in November, this man had not been arrested, and up to a few weeks ago he was not arrested. If he has been arrested since it will be information to some of us. That was the first misstatement the Chief Secretary made. Then there was published an official photo purporting to be a photo of Ballymacelligot taken at the time of this incident. We discovered that the original of the photo was a place over 100 miles from Ballymacelligot.
When we got there we found that actually there had not been a military inquiry, at least a fortnight after. Two men had been killed on the spot, a creamery had been burned down, ricks had been burned down, a member of His Majesty's forces; a nurse, had been disgracefully used and robbed, five men had been arrested and were lying in prison, and there had been no military inquiry. When we drew attention to the fact here there was one in a hurry. Six months afterwards the five men who had been arrested were put on their trial and immediately two were released. The other three, we understand, were convicted. This is about two months ago, and they have since then been released, so we understand. What is the situation with regard to the whole incident? It occurred seven months ago, it involved brutal murders and robbery on the part of the forces of the Crown, it was six months before the men arrested were put upon their trial, the trial took place two months ago, and for public consumption purposes three men are convicted and then released, and the Chief Secretary tells us that he has not yet got a full report as to what has happened. It was a shameful incident. If the Irish Office desired to conduct its policy with some sense of fairness and honesty to Ireland and to this country, it was an incident that they would have washed their hands of at once and punished the people concerned in it, but we find that they cover it, and they come to the House of Commons and think they can say repeatedly that they have no in-
formation. When the hon. Member for the Falls Division (Mr. Devlin) and others give special notice of questions day after day about brutal murders that have taken place in the night, do they wonder that we say at once that they are doing the same thing as they did in regard to Ballymacelligot?
Ballymacelligot is, to my mind, the key question and proof that Dublin Castle is a cesspool of murder and of deceit so far as the public in this country are concerned. I wonder when this House—I do not care on what side one sits—is going to strike and to speak definitely against the contempt with which the Irish Office treats this House. It is a shame. I spoke the other night, and I was misinterpreted even by some of my own fellows on this side. I said very definitely, "If you are going to carry out a policy with which I disagree myself, get at least disciplined forces and a man at the head who will be responsible to the representative of the Irish Office in this House." Does anyone dream that it would be possible with the Army, if they were guilty of that kind of thing, for a body of men to go out and commit murder or pillage and then for the commanding officer to say that he did not know who was out or exactly what had taken place? That would not be possible, but it is possible now because the Government and the Members who support the Government have not even a faint idea as to an efficient method of carrying out their own policy, and I say that, if this is the method with which they are going to deal with the creameries of Ireland and with the people of Ireland, there is no hope whatever, as far as this country is concerned, of anything but a long-drawn-out, bitter struggle, in which we may keep the people of Ireland with us by brute force, but what is left when we are finished will scarcely be worth the having.
I want to ask the right hon. Gentleman if he will cease that wriggling that is so characteristic of the Irish Office, that he will be straight with this House, and tell them what occurred in regard to the Ballymacelligot inquiry. If he is not honest, and not prepared to tell the truth about an incident of that kind, which has clearly gone against him, I say we shall be right in coming to the conclusion that they have made up their minds to defend organised robbery and organised murder,
which is supported and encouraged by the Irish Office, and the Irish Office treats the House of Commons in return absolutely with contempt when it dares to ask about this question. This is only a part of the great tragedy. It is the same thing whichever way you turn. According to the Irish Office, the only means of settling any question, or of arguing with any person, is to hit him with a club. That is the policy of the Government. It is that spirit which is reacting upon the people of this country, which is responsible for industrial disputes; it is that spirit which creates irritation and friction and which leads to the sour temper which is so manifest throughout the country at the present time.
I therefore ask the representative of the Government to tell us frankly what occurred at Ballymacelligot, what has been the actual result of that trial, what they are going to do with the creameries, if they are going to destroy the creameries altogether, or if they are going to destroy the agricultural industry of Ireland. In other words, have they made up their minds to destroy one of the best customers we have and thus intensify the unemployment that is prevailing in this country? I hope we shall have a frank reply along those lines. If not, I am going to tell the right hon. Gentleman and this House that in the future, when dealing with Irish questions, I shall not deal along the ordinary lines of reason, but I shall meet the Irish Office with the same methods with which they meet this side, and if it has results personal upon me, I shall at least have this consolation, that I am not silent in this House while innocent people are being murdered and robbed by the forces of the Crown with the consent of the Irish Office, as they have been during the past year or two.

Mr. ACLAND: I should normally have agreed with anyone who suggested that a rather warm Friday afternoon was not the time to raise an Irish debate, but the question of Ireland is such a misery and an anxiety to many Members of this House that it seems to me that any time is a good time upon which to call attention to the matter. This has been a very dramatic week in the history of Ireland. I shall refer to His Majesty's Speech in Belfast knowing quite well that constitutionally His Majesty gives utterance
to the words that his Ministers have advised him to use, and I shall refer to his speech only as being an expression of the considered opinion of the Government. It was a noble and splendid utterance, and did credit to them, and to the Monarch who uttered it. What was the thing, above all things, that the Government should have tried to do at the time they advised His Majesty to make that speech? Why, create a good atmosphere in Ireland for the reception of those magnificent words, asking the Irish people to forgive and forget. And yet, I think, it was the day before, we had pronouncements in another place and in this House, known the next day by every Irishman through the Press, which must have made them think that, either the utterances in these Houses were hyprocrisy running entirely counter to the speech, or that the speech which His Majesty had been advised to deliver was hypocrisy, running dead counter to the policy to which utterance was given in the two Houses of Parliament. I listened from the steps of the Throne to the speech in another place, and every suggestion that had been made, trying to bring a new atmosphere and a new spirit into Irish administration, was gone through with great ability and great power by the spokesman of the Government, but one after another they were absolutely turned down. Suggestions had been made for revising the financial provisions of the present settlement, and we were told that if it were proposed only to make a partial revision of finances, that would reconcile no one; whereas, if it were proposed to give Ireland fiscal autonomy, that would result in people in Belfast having an income tax of 1s. 6d. and people in Glasgow one of 6s., and that that was clearly impossible. Suggestions had been made with regard to entering into negotiations. We were asked, in a rhetorical way, with whom we were to negotiate. If we were to negotiate with Dail Eireann, many of them were responsible for murder, and that was impossible; and if we were to negotiate with anybody else, that also was impossible, because nobody would take any account of negotiations, except with those who had been chosen by the great majority of the Irish people.
One suggestion after another to bring about a better atmosphere was turned down, and at the end, we were told that if the Government found it necessary to
send more force, that force would be unhesitatingly supplied. And the same evening in this House, the Secretary of State for War chimed in with an expression of the same policy. Troops, and still more troops, were to be sent to Ireland. The policy of troops was the only one the Government had in its mind. The policy of troops, the policy of force, has never succeeded in the British Empire as a way to settle any question. It never will succeed, and still less can it possibly succeed with a very high-spirited, ingenious nation like the Irish. Everyone knows it cannot be a settlement, and yet here, when we had a chance through the splendid words of His Majesty in turning the thoughts of his Irish people, if it is not too late, in the direction of friendliness to this country, that chance seems to have been deliberately smashed by the utterances of representatives of His Majesty's Government itself. How can the Irish people come to any other conclusion than that a certain section of His Majesty's Government is determined to checkmate and to overthrow the policy of His Majesty's Government in general as it was enunciated in Belfast the other day?
This is the central tragedy of the Irish position as I see it at the present time. Things must be done soon. The demand for absolute, unconditional independence is hardening out every day. The sands are running out. People are getting tired of having any truck or lot with us, and we know quite well that, if you take the ordinary citizen of this country, practically never would he agree to Ireland being an entirely independent country. We are faced, if we do not take care, with two unalterably hard determinations on the opposite sides of the Channel—on one side a determination to have absolute independence, and on the other a determination that it shall never be given. I believe these next two months are absolutely vital if we are to prevent that hardening out of opinion on the two sides of the Channel, and yet in power here is a Government which, owing to its actions, no Irishmen really will trust to give them anything like fair play and fair dealing, even if both sides did meet together round the council table for mutual discussion and accommodation of difficulties. I suppose the right hon. and learned Gentleman opposite (Mr. Henry)
cannot deal with these great, terrible and tragic questions this afternoon, and it would be hard to expect him to do so, but I have thought it right for five minutes in this House today to express the terrible anxiety, and indeed misery, with regard to this question that is in the minds of so many of us, I am sure, in all quarters of the House at the present time.

PENSIONS.

Mr. CAPE: I am sorry the Minister of Pensions is not present, and, on account of what has happened, I have been unable to give him notification of the question I wish to raise. It is with regard to what I may call the maladministration of the Ministry of Pensions with regard to the pensions of discharged men. Generally speaking, we find within recent weeks there has been a deliberate attempt made and carried out to reduce as many pensions as possible. We find that the first thing that takes place is that the local pension committees, by some method or other, are authorised to stop the payment of pensions. After certain inquiries and investigations the pensioners are referred to what is called the House of Lords Appeal Tribunal, and generally speaking, we find that in the majority of cases which go to the tribunal decisions are given against the applicant. In answer to a question I put to the Minister of Pensions some time ago, he stated that there had been over 14,000 cases heard before that tribunal during twelve months, and of those cases over 10,000 decisions had been given against the applicant. It seems to me the Ministry of Pensions, regardless of their obligations to these men who served the country so faithfully, were scared when the anti-waste campaign took place, and one of the first steps they took with regard to economy was against the men who had done so much for this country.
I have one instance on record of a soldier who fought during the South African War, and was partially incapacitated. When the great European War broke out this man, having the natural instincts of a soldier, offered himself for enlistment. He was passed by the medical officers in the locality, and, being an old soldier, was immediately sent out to take his place in the fighting line.
This man served for over three years, and in the result had a breakdown, and was subsequently discharged from the Army as medically unfit. He was paid a pension until about the middle of last year, when he was suddenly told that he was not entitled to any further pension. He appealed through the usual channels, and finally found himself at Newcastle-upon-Tyne before this House of Lords Appeal Tribunal. Six cases were heard on that day and five were turned down, including his case. He was not able to follow any employment. He had served during two wars and done all that a man could do for his country, and then he was told that, after all, what he was suffering from was not attributable to the War.
There is another case, that of a widow whose husband was called up as a Territorial in 1914. He went early to France. He was married in May, 1915. Before he died he was the father of three children. During the time of his marriage, and after being discharged from the Army in 1916, he received a pension and also allowances for the children born during the War. When that man died, his death being due as was definitely stated by the Medical Officer to disease caused by the War, the allowances ceased. I have made repeated applications to the Minister of Pensions. I have been told that the disease which the man contracted was contracted prior to his marriage, but I want to submit that the man was married on the strength of the regiment and his wife received a wife's allowance during the time he continued to serve. He was brought back from France medically unfit for foreign service, and was for about fifteen months stationed at different parts of England on duty. At any rate, when death took place the widow and the three children were entirely cut off and were told they were not entitled to any pension.
There are several other cases I could mention, one of quite a tragic character. I do want to say that in my opinion the question of pensions generally ought to be fully considered by those in authority, and sympathetic consideration given to those who have fought or their dependants. Perhaps the House would like to hear this case. It concerns a man who lost a leg in France. He was paid a pension up till 22nd February last. Then he was similarly told that he had not lost his leg owing to the war. It is well known
that he had both legs when he went to France, and he came back with only one. The medical officer of his battalion had amputated the limb after an accident. A pension was paid him. No question was raised till February. He was then suddenly told by letter that he could not have lost his leg owing to the war, and that consequently there was no further pension. After considerable difficulty we were able to get the pension renewed. The point I want to make is that that man had about fourteen weeks to go without any pension, because someone had made up their mind that this man did not lose his leg owing to the war. All these cases bring bitterness into the minds of the men who have served. I do not know what other hon. Members may feel, but I am inundated with letters from different people and from the Discharged ex-Service Men's Organisations appealing to me in connection with cases of a similar character. I ask the Minister of Pensions to make some inquiries into the general way in which pensions are being disbursed, and to try, if possible, to give better satisfaction to those entitled to pensions to what has hitherto been the case.

Mr. ROSE: I should like to reinforce what my hon. Friend has said, perhaps from another standpoint. What he said is only on all fours with the experience of every sympathetic Member of this House. We are all still inundated with applications from people whose pensions have been cut off for some reason which seems to me to be neither convincing nor satisfactory. It is, however, a somewhat broader issue that arises out of the consideration of these cases. Throughout the war if anybody raised one's voice in public or private by way of criticism about the appalling waste that was going on, we were told that nothing mattered but winning the war. Now nothing matters to these hard-faced profiteers and economy stuntists but making some other fellow pay for it. If they can make the poorest and the most deserving pay for it, well and good. If it does not interfere with their own profits and their own interests they are all for economy. I do not know that there is any more demoralising or degrading spectacle to a mere human being than to contemplate this economy stunt that is now going on. These people will vote away tens of millions if it is for
their own pockets, but as soon as it comes to some contemptible trifle that does not matter, or ought not to matter, they accuse the Government of "squander-mania"—I think that is the term. There are plenty of incidents and instances which bear out the view I am taking. The question of pensions is one that this Government will have to take up and consider seriously. It is not satisfactory. It gives the lie to those greasy professions of gratitude to our noble defenders in the late War. They were excellent people. They were the salt of the earth when they were fighting and sacrificing, but when they want a mere subsistence as a reward for the sacrifices they have made hon. Members on the other side are apt to sneer. It is such a funny thing for a man to lose his leg. [HON. MEMBERS: "No, No."]

Captain ELLIOT: Shame!

Mr. ROSE: It is so humorous a thing that a man who lost a limb in the War should not get any pension, or indeed any subsistence allowance or a widow some allowance. We ought to look at this thing from a very much broader and generous standpoint. If money can be spent now, it had better be spent doing our duty, in redeeming our pledges to those who have made us possible, than to sneer, and regard the individual as quixotic and stupid who raises the question as my hon. Friend has just raised this matter.

Captain ELLIOT: I beg to protest against the unwarrantable and unjust assumption of the last speaker. The idea that anybody on these benches was sneering at a man who had lost his leg is quite unwarranted. The matter was treated in a somewhat jocular manner by the speaker who brought forward the case, when he said that the man had gone to the War with two legs, and come back with only one.

Mr. CAPE: I intended to say it in a serious manner.

Captain ELLIOT: On this matter I am within the recollection of the House. With every desire to put some light and shade in his speech, the hon. Member did refer to this matter in a light tone no doubt with the best intentions, but to say that because hon. Members happened to laugh at the hon. Member's joke, and to accuse them of sneering at a man who lost his leg is quite unwarranted, and I beg to
protest against this attempt to make party capital out of pensions. If the next thing to be brought into the party arena is pensions, and if hon. Members are going to say what they would do for pensioners, and what we are not doing, then I enter a most emphatic protest.
The House of Lords Appeal Tribunal was set up by this House to take pension appeals out of the hands of Parliament, in order to avoid the accusation that one party would cut down pensions, while another would raise them. This House refused to allow old age pensions to be made a party matter, and resented the attempt of certain hon. Members to reintroduce it in the party arena, and surely what we did for the old age pensioners we can do for the war pensioners. These appeals may not be satisfactory, but the tribunals are nominated by the Lord Chancellor whose decisions we cannot review. If any change is required let it be done in a proper manner instead of this question being made a sort of football by one party saying "You are trying to drag down the pensions" and the other saying "Codlin is the friend, not Short."

Mr. WALLACE: I absolutely agree with what the hon. and gallant Gentleman who has just spoken has said. In every section of this House I know there is the most genuine sympathy in these cases, and it is most unfair that any slur should be cast upon any section of the House in this particular matter. This is a very cheap form of a very unworthy propaganda, but I wish to mention a matter which concerns my own constituency. I wish to raise the case of a woman who has been in receipt of a pension on account of the regrettable loss of her son in the War. She has also been granted a certain amount of parish relief by the town council. Since the Minister of Pensions heard that parish relief was being granted, the Department has reduced the amount of the pension which she received on account of the loss of her son. The matter was brought before the Provincial Director in Edinburgh, and he was asked for an explanation, but he was not able to give any satisfactory answer. On being asked to give his authority he declined to do so.
I think this is a matter of sufficient importance to be brought up here, and I
hope that the representative of the Government who is now on the Front Bench will bring the matter before the responsible Minister. The case has excited considerable comment and great dissatisfaction exists in regard to it, and some explanation is expected of this extraordinary policy. When the town council decided to grant parish relief they took into account the amount of the pension this woman was receiving, and it seems to me not only illogical but unfair and altogether unworthy of a great Department to take a step of this kind without giving some adequate explanation, and I hope the representative of the Government will bring the case before the Minister of Pensions.

Captain WEDGWOOD BENN: I wish to draw attention to the practice of the Government in attempting to defeat the power of this House to control taxation. I introduced the other day a small Bill to make it perfectly clear that the House of Commons itself should decide where taxes should fall, and upon whom. Of course, such a Bill has very little chance of being discussed now. It was necessary to have a discussion of this question, because under the Guillotine Resolution relating to the Safeguarding of Industries Bill, this question comes in at a point when the Closure will have been moved and the question of whether the House of Commons shall control taxation or not will not be debated, but will be put from the Chair under the Guillotine Resolution. I introduced a small one Clause Bill dealing with the matter. This afternoon the Government business being concluded, there was an opportunity for a short Debate on that Bill. [HON. MEMBERS: "No!"] At any rate there would have been had the Government not moved the motion for the Adjournment.

Captain ELLIOT: Before that motion came on, there were two rather contentious matters, one of which I am certain would have taken up the rest of the time.

Captain BENN: I know on this matter the hon and gallant Gentleman opposite is really with me. At any rate there was a possible opportunity of debating this question, but this is another instance of the Government policy of trying to suffocate the power of the House of Commons; in regard to money matters.

CORPORATION PROFITS TAX.

Sir J. D. REES: As I believe I am in order I merely wish to ask if the Financial Secretary to the Treasury will look into a matter under paragraphs (B) and (C), Sub-section (2), of Section 53 of the Finance Act, 1920, under which directors who have a controlling interest in a company are not allowed any remuneration in excess of £1,000 per annum, and the deduction is disallowed in the case of directors having a controlling interest or any interest on money paid to such directors. I gave my reasons for this at the time and they are on record in the Debate. I understood the then Chancellor of the Exchequer to say that there was at any rate some prima facie ground for considering a change necessary in respect of this matter. Nevertheless, as nothing was done, I would ask my hon. Friend if he, would take note of my point, and see what tan be done in the Budget of the present year on this account.
Upon the Corporation Profits Tax I want to ask him also to look up this point. Under Sub-section (4) of Section 28 of the Finance Act, 1920, it is provided that, in estimating income for the purpose of United Kingdom Income Tax, no deduction shall be made on account of the payment of Dominion Income Tax. Sub-section (2) of Section 53 of that Act provides that profits for the purpose of the Corporation Profits Tax are to be determined upon the same principles as those on which the profits and gains of a trade would be determined for the purposes of Schedule D set out in the first Schedule to the Income Tax Act, 1918, as amended by any subsequent enactment. From this I gather—my hon. Friend will tell me if I am wrong—that a company is not entitled to deduct Dominion Income Tax before its profits are assessed for Corporation Profits Tax, but if the Dominion Income Tax paid be added back, then the ultimate result to the shareholders in a company carrying on business abroad and having to pay Dominion Income Tax, as compared with a company carrying on business in the United Kingdom, will be worse to the extent of the Corporation Profits Tax on the amount of the Dominion Income Tax. That does not appear to be equitable, and I doubt very much whether such is the intention of the Act. I have put this point in a concentrated form, be-
cause I do not wish to have any discussion on the subject. I do not expect my hon. Friend to do more than to say that he will be good enough to look into it. I will hand the notes to him. In certain quarters of the House it will be known that for a great number of years I have been in the habit of dealing with the question of the double Income Tax, and that is my excuse for troubling the House at this time.

The FINANCIAL SECRETARY to the TREASURY (Mr. Hilton Young): I am the very last to complain of the hon. Member raising on this occasion subjects of this nature, which are always so attractive and full of interest. As he has justly said, it would not be well, in matters which involve certain intricate considerations, to hasten to a rash pronouncement. As to the first matter which he raised, I do not think that even on the spur of the moment if would be right that I should hold out to him any hope that there is any likelihood to be a reconsideration. The allowance for directors in assessing profits for Excess Profits Duty was, as he will no doubt remember, a matter which was thrashed out with a great deal of consideration and with a certain amount of what it would not be unfair to call give and take in the course of the discussions on previous Finance Bills. That was an appropriate matter considered during the progress of the duty, but it would not be an appropriate matter to consider by way of additional relief, altering to some extent the basis of the duty, now at a time when the duty is actually being repealed. The matter, however, will be taken into account, and I will bear in mind what he has said.
The second point which he raised will need a little further consideration. I should imagine that the reference would not be to Section 28, but to Section 27, Sub-section (4), of the Finance Act, 1920. I do not recognise how Section 28 can have any reference to the matter, but Section 27, which deals with double Income Tax, will come into account. My first impression, subject to what may subsequently be revealed by further consideration, is that the imperfections to which he has referred are very likely relieved by the earlier provisions of that section, fixing the machinery for avoiding the double Income Tax beyond a certain degree, and, as far as I can see at the
moment, the effect of those provisions as regards relief from the payment of double Income Tax would operate to remove an inequality of the sort to which he was referring in connection with the Corporation Profits Tax, but the point, undoubtedly, is one of interest and concern
to the companies which pay the tax, and I will take the opportunity of ascertaining exactly how the matter stands before we come to consider it on Report.

Adjourned accordingly at Nine minutes before Four o'Clock.